IMF warns war will mean higher prices and slower growth, flags global forecast downgrade
IMF chief Kristalina Georgieva says the Middle East war is pushing inflation up and growth down, with the Fund set to cut global GDP forecasts and raise inflation projections in its April 14 outlook.
The International Monetary Fund (IMF) has warned that the war in the Middle East is becoming a major drag on the global economy, driving up prices while slowing growth, and said it is preparing to downgrade its global outlook.
IMF Managing Director Kristalina Georgieva told Reuters the conflict is already feeding inflation and reducing growth momentum, and that even if the situation eases quickly, the IMF still expects to lower growth projections and raise inflation forecasts in its next World Economic Outlook, due on April 14.
Georgieva said the shock has hit global energy supplies hard, with crude supply estimated to have fallen by 13%, while disruption around the Strait of Hormuz has affected a significant share of global oil and gas shipments.
The IMF also warned the impact is not limited to oil, with spillovers to related supply chains including natural gas, helium and fertiliser—all key inputs for global industry and agriculture.
Georgieva said poorer, energy-importing countries are likely to be hit hardest because they have limited fiscal capacity to cushion households, raising risks of social strain. The IMF said it is coordinating with the World Bank and other agencies to manage the economic and energy shock, while monitoring food-security risks if fertiliser supply remains disrupted.
