IMF Slashes Global Growth Outlook Amid Mideast Turmoil

The International Monetary Fund (IMF) said it will lower its global growth forecast next week , pointing to the ongoing US-Israel war on Iran as a key driver of the downgrade. The IMF made the announcement on Thursday, April 9, 2026, and linked the shift to the economic fallout from the conflict.

IMF Managing Director Kristalina Georgieva said the war has created conditions that could trigger an inflationary crisis. She said the world economy had previously shown resilience even as trade tensions weighed on activity, but the conflict has introduced a new and significant shock.

The war began on February 28 and has pushed up oil and natural gas prices, according to the IMF’s description of the situation. The IMF also said energy infrastructure has been damaged and fertilizer shipments have been disrupted, adding to the strain on global supply chains tied to energy and agriculture.

Georgieva said these disruptions have weakened business and consumer confidence around the world. The IMF framed the confidence hit as part of a broader transmission channel through which the conflict is affecting the global economy, alongside higher energy costs and supply interruptions.

Before the war started, the IMF had upgraded its global growth outlook to 3.3 percent in January and was positioned for another upgrade. The IMF now says the conflict has changed that trajectory, and the next set of projections will reflect a weaker outlook than previously expected.

Georgieva urged member countries to reinforce economic resilience in response to the new risks. She also noted that higher defense spending is adding pressure to the global economy, as governments adjust budgets amid heightened security demands.

On IMF resources, Georgieva said she was optimistic about approval of a 50 percent increase in quota lending resources. She said this would expand the IMF’s immediate lending capacity from its $1 trillion total, a change presented as strengthening the institution’s ability to respond to member needs.

The IMF also cited findings from a recent report on the economic costs of conflict. According to that report, countries experiencing conflict typically face a 3 percent output fall at the outset, and cumulative losses can reach about 7 percent within five years.