US EditionGlobal economy at risk of recession if Iran war persists, warns IMF
- 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.
198 Articles
198 Articles
Washington, Apr 15 (EFE).- Managing Director of the International Monetary Fund, Kristalina Georgieva, stressed this Wednesday that if the war in Iran persists and inflation continues to rise globally, everyone must prepare to face “difficult times.” “If the conflict persists and all prices remain high for a long period of time, we must prepare for difficult times,” Georgieva said at a press conference at the third day of the spring meetings of …
Mohamed El-Erian warns of 'sobering' global economic outlook as war rages
Economist Mohamed El-Erian has warned of global economic fallout from war in the Middle East.PIMCOThe IMF's latest outlook sends a "sobering" message about the global economy, Mohamed El-Erian says.The economist said the Middle East war threatens growth, inflation, inequality, and public finances.El-Erian warned of a "stagflationary wind" and "unsettling financial instability" in recent weeks.The global economy faces a laundry list of threats, a…
War on Iran Could Lead to Global Recession, IMF Warns
An employee works at a petrol pump station in Baramulla, Jammu and Kashmir, India, on April 8, 2026. —Nasir Kachroo—NurPhoto/Getty ImagesThe International Monetary Fund has warned that the world may be headed for a global recession if energy and supply disruptions due to the U.S. and Israeli war with Iran drag on.“A longer or broader conflict, worsening geopolitical fragmentation, a reassessment of expectations surrounding artificial‑intelligenc…
The International Monetary Fund (IMF) dropped its estimate of global economic growth to 3.1 percent in 2026, 0.2 points below last January, and kept it for 2027 at 3.2 percent, this in its baseline scenario in which the war in the Middle East and its effects dissipate by mid-2026.However, given the uncertainty about the duration and scope of the situation, the most severe scenario considers a growth of just 2 percent this year and inflation of m…
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