The International Monetary Fund has warned that the war in the Middle East poses a significant risk to the global economy, potentially “throwing it off course.” Growth forecasts have been cut, with global growth now expected at 3.1% in 2026, down from 3.3% projected in January.
The conflict has already stalled economic momentum and triggered an oil shock, with the possibility of further downturns if the war escalates or energy infrastructure is severely damaged. Officials last week indicated they would downgrade growth forecasts and raise inflation predictions.
The IMF’s chief economist stated the current situation presents a greater risk than the initial tariffs imposed several years ago. A further escalation could trigger a global recession, spiralling inflation, and a sharp backlash in financial markets.
An unusual amount of uncertainty clouds the outlook, but the economic damage from the Middle East conflict is steadily rising. The fund’s latest assessment reflects the impact of the war so far.