IMF meetings warn geopolitical turmoil may slow world growth
Global finance leaders said conflict, energy disruption and supply-chain strain are putting a fragile world economy under sharper pressure.
- IMF and World Bank meetings expressed deep concern that frequent geopolitical shocks, such as energy and supply-chain disruptions, are threatening the fragile global economy.
- As a direct result of the turmoil, the IMF cut its 2026 global growth forecast, warning that a prolonged conflict could slow growth further and potentially lead to a recession.
- Tensions in the Middle East, particularly those affecting shipping in the Strait of Hormuz, were highlighted as a key factor destabilising global energy supplies and trade.
- Experts at the meetings concluded that geopolitical uncertainty is the "new normal," forcing countries to adopt more flexible and diversified economic policies to reduce their vulnerability.
The Spring Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) in Washington, D.C., reflected deep concern among global economic leaders over the fragility of an economic system facing increasingly frequent geopolitical shocks, at a time when the ability to cushion the impact remains limited and reliance on the United States to resolve crises is no longer as certain as it once was.
The tone of the discussions swung between anxiety over a weakening global outlook, driven by energy and supply-chain disruption, and brief optimism after signs emerged that the Strait of Hormuz might reopen, allowing shipments of oil, gas and other commodities to resume.
That hope, however, quickly faded after further attacks on shipping.
The IMF and the World Bank announced up to US$150 billion in combined assistance to support developing countries hardest hit by surging energy prices, while warning governments around the world against hoarding energy supplies and urging the use of clearly targeted subsidy measures.
Even though support measures were announced, experts said the decisive factors shaping the global economy lay outside the meetings, particularly tensions between the United States and Iran, which have a direct impact on global energy stability and trade.
The IMF also cut its 2026 global growth forecast to 3.1% in its best-case scenario, while warning that growth could slow to just 2.5% and that the world economy could slip into recession if the conflict drags on.
The current situation reflects “compounding shocks” to the global economy, from the Covid-19 pandemic in 2020 and Russia’s invasion of Ukraine to the latest tensions in the Middle East, leading many countries to conclude that the United States may no longer be able to serve as the “leading force” in shaping the global economic order in the way it once did.
Developing countries, particularly in Africa, are already accelerating adjustments to their economic strategies by promoting more intra-regional trade, developing alternative energy sources and expanding domestic revenue bases to reduce vulnerability to external shocks.
At the same time, officials from many countries, particularly in Europe, expressed hope that the United States would move quickly to reopen shipping through the Strait of Hormuz, given its importance as a strategic artery for global energy supplies.
For Thailand, a net energy importer that is preparing to host the Annual Meetings of the IMF and the World Bank Group in October, the prospect of persistently high energy prices presents a clear challenge.
Even so, the government sees the crisis as an opportunity to accelerate the shift towards renewable energy, such as solar power, to reduce long-term dependence on fossil fuels.
Experts agree that geopolitical uncertainty will become the “new normal” for the global economy, forcing countries to make their economic and financial policies more flexible and more diversified in the years ahead.
