Overview
- IMF economists, in a World Economic Outlook released Tuesday, trimmed 2026 global growth to 3.1% and lifted the inflation outlook to 4.4%, saying the war has halted recent momentum.
- The report lays out three paths tied to oil prices, with a severe case cutting growth to about 2% and pushing inflation above 6%, a level the IMF says would be a close call for a global recession.
- The hit is uneven, with emerging markets facing almost twice the impact of advanced economies; the UK sees the sharpest G7 downgrade to 0.8% growth, the US is nudged to 2.3%, Pakistan is cut to 3.5% with inflation at 8.4%, and Turkey is lowered to 3.4%.
- The shock flows through energy supply routes, including the Strait of Hormuz, a narrow channel that carries about a fifth of the world’s seaborne oil, which has helped push crude above $100 and driven steep jumps in natural gas and fertilizer costs.
- The IMF urges targeted, temporary fiscal aid and vigilance from central banks to prevent second‑round price spikes, warning that prolonged disruptions could harden inflation and strain budgets as finance officials meet in Washington.