IMF: Middle East war to slow global growth, stoke inflation

IMF says the ongoing war in the Middle East will drive up inflation and slow the pace of global economic growth

The International Monetary Fund (IMF) said the ongoing war in the Middle East will drive up inflation and slow the pace of global economic growth.

Speaking to Reuters on Monday, IMF Managing Director Kristalina Georgieva said the fund had, prior to the conflict, expected a slight upgrade to global growth forecasts to 3.3% in 2026 and 3.2% in 2027.

However, the current environment has shifted, dominated by price pressures and weaker output, noting that absent the war, the world would have seen an improved growth outlook.

She added that even with a swift end to hostilities and the start of a recovery phase, a relatively modest downward revision to growth forecasts is still likely, alongside an upward adjustment to inflation projections. A prolonged conflict, she warned, would deepen the negative impact and intensify both inflationary and recessionary pressures.

Georgieva also revealed the IMF has received requests for financial assistance from unnamed countries, affirming its readiness to scale up certain existing lending programs to support economies affected by the crisis.