The International Monetary Fund (IMF) is set to cut its global growth forecasts, citing the economic fallout from the ongoing Middle East conflict despite a fragile ceasefire.
IMF Managing Director, Kristalina Georgieva, warned that the war’s “scarring effects” will weigh heavily on economies, with rising energy costs, damaged infrastructure, and disrupted supply chains undermining recovery prospects. Even under the fund’s most optimistic scenario, she said, global growth will fall short of earlier expectations.
The IMF estimates that demand for balance-of-payments support could rise by $20 billion to $50 billion in the near term, depending on the durability of the ceasefire. It also expects to provide up to $50 billion in emergency assistance to countries hit hardest, as food insecurity threatens at least 45 million people.
Speaking alongside IMF officials at the Spring Meetings in Washington, Ajay Banga, president of the World Bank, said his institution could mobilise $25 billion, with up to $60 billion available over time.
The conflict triggered by a US-Israel offensive against Iran has disrupted global oil flows, particularly through the Strait of Hormuz, sending prices higher and intensifying inflation pressures. The IMF now expects to revise upward its global inflation forecast.
Regionally, the World Bank projects that growth in the Middle East (excluding Iran) will slow to 1.8% in 2026, a sharp downgrade. Both institutions have launched a joint coordination effort to address energy market disruptions and broader economic risks.
