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IMF Warns Middle East War Is Driving Higher Prices and Slower Global Growth

The lender flags an uneven shock that tightens financial conditions, with a fuller outlook due April 14.

People inspect damage to a residential building after it was hit by a strike, amid the U.S.-Israeli conflict with Iran, in Tehran, Iran, March 30, 2026. Majid Asgaripour/WANA (West Asia News Agency) via REUTERS

Overview

  • IMF economists, in a blog published Monday, said the conflict is a global but uneven shock that is tightening financial conditions and dimming growth prospects.
  • The International Energy Agency says Iran’s closure of the Strait of Hormuz, a narrow route for much of the world’s oil and gas, plus infrastructure damage, has caused the largest disruption to global supplies on record.
  • Large energy importers in Asia and Europe face a renewed cost-of-living squeeze, with the UK and Italy more exposed to gas-fired power while France and Spain are cushioned by nuclear and renewables.
  • The IMF warns low-income countries face rising food insecurity as food and fertilizer costs climb and shipments from the Gulf stall near planting season in the Northern Hemisphere.
  • The IMF will provide a fuller assessment in its World Economic Outlook on April 14, noting outcomes hinge on how long the war lasts, how far it spreads, and the damage to infrastructure and supply chains.