US EditionGlobal economy at risk of recession if Iran war persists, warns IMF
The fund said energy shocks from the conflict have lifted inflation to 4.4% and could cut global growth to 2% in a severe case.
- On Tuesday, the International Monetary Fund downgraded its 2026 global growth forecast to 3.1% from 3.3%, warning that energy shocks from the Iran war threaten to push the global economy off course.
- President Donald Trump launched strikes against Iran on February 28, 2026, triggering a regional conflict that effectively closed the Strait of Hormuz and disrupted global energy markets.
- IMF chief economist Pierre-Olivier Gourinchas told Reuters the conflict poses a "far bigger risk" than previous U.S. tariffs, with prolonged energy shocks potentially slashing global growth to 2% in a severe scenario.
- Central banks face difficult trade-offs: they may need to raise interest rates to combat inflation while governments without fiscal space struggle to fund relief, increasing debt risks for vulnerable economies.
- Global inflation could reach 6% in a severe scenario, with the IMF warning that a worldwide recession remains a "close call" if the conflict persists and oil prices stay elevated.
130 Articles
130 Articles
‘Very dark picture’: IMF warns Trump's war may unleash recession
The International Monetary Fund warned Tuesday that the US-Israeli war on Iran could slow global economic growth, stoke inflation, and increase the possibility of a worldwide recession and energy crisis.The illegal war of choice on Iran being waged by US President Donald Trump and the government of fugitive Israeli Prime Minister Benjamin Netanyahu has already had wide-ranging negative impacts on the global economy, from soaring fuel prices caus…
Weaker growth, higher inflation: Due to the Iran war, the International Monetary Fund expects a global slowdown for the current year. Europe is particularly affected. By Anne Schneider.[more]]>
IMF Cuts Growth Outlook, Warns Iran War Could Push Global Economy to Brink
The International Monetary Fund (IMF) on Tuesday cut its growth outlook and warned the global economy could edge toward recession if the Iran war intensifies, as energy disruptions ripple through inflation, financial markets, and trade. In its latest World Economic Outlook and accompanying analysis, the IMF said the Middle East conflict—now disrupting a key share of global oil and gas flows—sent previously positive growth momentum to an unexpect…
The global economy is likely to experience a recession if the war between the United States and Israel against Iran continues and high energy prices persist.
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