Mideast Conflict Slashes Global Growth Forecast

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said the ongoing Middle East conflict is set to push global inflation higher and slow economic growth, with the IMF preparing to lower its forecasts next week. Georgieva made the comments in an interview on Monday, April 6, and said the revisions would come even if the conflict ends quickly.

Georgieva linked the economic shock to a major disruption in energy flows. The war has led to a 13% reduction in global oil supply , which she attributed mainly to Iran’s effective blockage of the Strait of Hormuz . Officials described the strait as a vital route for roughly one-fifth of the world’s oil and gas shipments , making it a key chokepoint for global energy trade.

The disruption has also spilled into other supply chains tied to energy and shipping. Georgieva said the shock has affected related flows including helium and fertilizers , adding to the channels through which the conflict can feed into prices and activity across multiple economies.

Before the conflict’s escalation, the IMF had been expecting a modest improvement in its medium-term outlook, with global growth projections of 3.3% for 2026 and 3.2% for 2027 . Georgieva said the war has reversed that direction, and that the IMF now expects to revise growth down and inflation up. She added that even a rapid resolution would still leave the IMF making those adjustments, while a longer conflict would intensify the economic damage.

Georgieva said the hardest hit would be energy-importing nations , with particular pressure on vulnerable countries that lack energy reserves and have limited fiscal space. In those cases, higher import bills and reduced room for policy support can compound the strain from rising prices and weaker growth.

The IMF is preparing to publish a range of scenarios in its upcoming World Economic Outlook on April 14 . Georgieva said the IMF is coordinating with the World Bank and the International Energy Agency to assess the full economic and energy effects, reflecting the cross-border nature of the shock and its relevance for both markets and policymakers.