The International Monetary Fund announces a reduction in global economic growth forecasts due to the escalation of the war in the Middle East. Even under the most favorable conditions, according to the Fund’s experts, the global economy is expected to face prolonged and serious shocks that may be irreversible.
This is reported by Finway
Reasons for the IMF’s Economic Forecast Changes
IMF Managing Director Kristalina Georgieva emphasized during the Spring Meetings of the IMF and World Bank in Washington that there will be no mechanical return to the previous state, even in the case of optimistic developments. In her opinion, the current situation is caused by a sharp increase in energy prices, widespread destruction of infrastructure, disruptions in global supply chains, and a significant decline in trust in international markets.
“Even in the best-case scenario, there will be no clear return to previous life.”
Impact on Inflation and Humanitarian Situation
The armed conflict that erupted in late February 2026 and led to the effective blockade of the strategic Strait of Hormuz has already resulted in a sharp spike in oil prices and significant disruptions in global logistics. This, in turn, leads to an increase in global core inflation and a revision of relevant economic indicators upward.
To mitigate the effects of the global shock, the IMF is preparing new emergency assistance packages. In particular, it plans to allocate between 20 to 50 billion US dollars to support the balance of payments of the most affected countries. In turn, the World Bank has expressed its readiness to quickly mobilize up to 25 billion dollars for developing countries, with the prospect of increasing this amount to 60 billion dollars in the long term.
Despite such financial inflows, the humanitarian crisis in the world is only deepening. According to estimates, at least 45 million people are already at risk of food insecurity due to the war in Iran and extensive logistical problems. Countries with low income levels, which critically depend on energy imports, will be the most affected.
A significant negative effect is also expected for remote regions, particularly Pacific island nations, which are at the end of supply chains and are uncertain whether they will be able to obtain the necessary fuel in the future. The IMF emphasizes that the current situation is leading to rising prices for goods and slowing economic growth rates worldwide.
Previously, the IMF had already warned about the increase in global inflation due to the escalation of the conflict in the Middle East.