The International Monetary Fund (IMF) has warned that it will downgrade its global growth projections, citing the ongoing Middle East conflict and its wider economic fallout.
IMF Managing Director Kristalina Georgieva said on Thursday that the war is already having “lasting scarring effects” on the global economy, even with a fragile ceasefire in place.
She noted that a full return to normal conditions is unlikely, adding that the crisis will continue to affect energy prices, supply chains, infrastructure, and investor confidence.
According to her, these disruptions mean global growth will come in weaker than previously expected, even under the most optimistic outlook.
The IMF also said it may need to provide between $20 billion and $50 billion in emergency financial support to countries affected by the conflict, as food insecurity is projected to impact at least 45 million people worldwide.
Georgieva made the remarks at the opening of the IMF–World Bank Spring Meetings in Washington, where global financial leaders are discussing rising economic risks.
World Bank President Ajay Banga also said his institution could quickly mobilise up to $25 billion in support for developing countries, with potential financing rising to $60 billion over time if needed.
The conflict, described as the US–Israel war on Iran, which began in late February, has significantly disrupted trade routes, pushed up oil prices, and strained global supply chains, particularly after tensions affected movement through the Strait of Hormuz.
While a ceasefire is currently in place, both sides have accused each other of violations, and further talks aimed at a lasting peace are expected soon.
Georgieva also highlighted that poorer and energy-importing countries are bearing the heaviest burden of the crisis, warning that some Pacific and low-income nations could struggle to maintain fuel and food supplies due to global disruptions.
She added that rising oil, gas, and fertiliser prices, combined with transport bottlenecks, are likely to push food prices higher and worsen global hunger levels.
Meanwhile, the World Bank has said the Middle East is already experiencing a sharp economic slowdown as a result of the conflict, with growth forecasts for the region significantly revised downward.
The IMF is expected to update its global inflation outlook in the coming weeks, with analysts anticipating higher inflation due to ongoing energy shocks and supply chain pressures.
Both institutions, along with the World Food Programme, have warned that prolonged instability could deepen debt levels, weaken economies, and increase the number of people facing food insecurity worldwide.
