US EditionGlobal economy at risk of recession if Iran war persists, warns IMF
The fund said a severe conflict scenario could cut global growth to 2% and push inflation above 6% in 2026.
- 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.
179 Articles
179 Articles
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…
Middle East Conflict Could Derail Global Recovery, Warns IMF: These Are The Countries Set To Get Hit Hard
The global economy is facing renewed challenges as conflict in the Middle East threatens to derail growth and slow the pace of disinflation, according to the International Monetary Fund. In its latest World Economic Outlook report, the IMF projects global growth will slow to 3.1% in 2026 before edging up to 3.2% in 2027, assuming the conflict remains limited in scope and duration. Inflation is expected to rise slightly in 2026 before resuming it…
The International Monetary Fund (IMF) has reduced its forecast for global growth to 3.1% in 2026, down from 3.3% previously forecast. Few countries are economically free from this war in the Middle East.
Middle East war will slow global economic growth, IMF warns | Honolulu Star-Advertiser
WASHINGTON >> War in the Middle East has upended the world economy, the International Monetary Fund said today, warning in a report that disruptions to oil markets could slow growth, fuel inflation and raise the possibility of a global recession.
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