The IMF has issued a bleak forecast due to the war in Iran: what will happen to the global economy?
7 April 05:13
The International Monetary Fund has warned of a deterioration in the global economic outlook due to the war in the Middle East. IMF Managing Director Kristalina Georgieva stated that the conflict surrounding Iran is leading to higher inflation and slower economic growth, and that even a rapid cessation of hostilities would not fully offset the negative impact on the global economy. She made these remarks in comments to Reuters ahead of the release of the new World Economic Outlook forecast, which the IMF is set to present on April 14, 2026, according to "Komersant Ukrainian"
According to Georgieva, if not for the war, the fund could have even slightly improved its estimates: global growth could have reached 3.3% in 2026 and 3.2% in 2027. But now, as the IMF chief emphasized, the situation is unfolding in the opposite direction: “all roads lead to higher prices and slower growth.” These baseline figures of 3.3% and 3.2% are also already listed on the page for the upcoming issue of the IMF’s World Economic Outlook.
Why the IMF is sounding the alarm
The main reason is the energy shock. Reuters, citing Georgieva, reports that the war has already caused the largest disruption in global energy supplies in history, and the blockade of the Strait of Hormuz has reduced global oil and gas flows by approximately 20%.
The IMF estimates that total global oil supply has already decreased by about 13%, and this affects not only fuel but also the supply chains of related goods—in particular, fertilizers and helium.
That is precisely why the IMF is not just talking about more expensive oil. The issue is a broader impact: rising costs for businesses, pressure on transportation, logistics, and manufacturing, and, as a result, accelerating inflation. In such a situation, countries face two problems simultaneously—more expensive goods and weaker economic growth—that is, the classic risk of a stagflation scenario.
Will things get worse if the war drags on?
Georgieva noted that even if the war ends quickly, the IMF will still be forced to lower its growth forecast and raise its inflation forecast. And if the fighting drags on, the blow to the global economy will be even stronger. In that case, the Fund expects even greater pressure on prices and a deeper slowdown in global growth.
This means that there is virtually no “painless” scenario left for the global economy. The only question is the scale of the damage: it will be significant in any case, but a longer war will make it substantially worse.
Who Will Be Hit Hardest
According to the IMF’s assessment, the poorest and most vulnerable countries—those lacking sufficient energy reserves and financial buffers—will suffer the most. Reuters reports that the shock will be particularly painful for energy-importing nations, as they are the first to feel the impact of rising prices for oil, gas, transportation, and fertilizers. The Fund also warns that problems with social stability could intensify in such countries.
This issue is also important for Ukraine, as our economy is sensitive to energy prices and external shocks. Although the IMF did not single out Ukraine in this specific statement, the Fund’s logic makes it clear: countries that depend on energy imports and have limited financial resources are more vulnerable to such a scenario.
What this means for the world right now
Some economies have already begun revising their expectations. For example, Reuters reported that leading German economic institutes have already lowered their growth forecasts for Germany for 2026 and 2027 due to the war in Iran, while simultaneously raising inflation expectations. And in the eurozone, the energy component is already pushing prices upward.
In other words, the IMF’s statement is not an abstract “just in case” warning. It fits into a broader wave of revised expectations across various countries and financial markets. To put it another way, the negative economic impact of the war in Iran is already being factored in not just in theory, but in practical forecasts as well.
When will the IMF’s new official forecast be released?
The IMF’s new global forecast as part of the World Economic Outlook is scheduled to be released on April 14, 2026. That is when the Fund will present updated figures on global growth, inflation, and key risks. It is already clear that the war in the Middle East will be one of the central factors in the new forecast.
