The International Monetary Fund (IMF) has lowered its global economic growth projections, warning that escalating tensions in the Middle East and disruptions to energy supplies are threatening stability.
In its latest outlook released Tuesday, the IMF said the global economy risks being “thrown off course” due to the outbreak of war in the region at the end of February 2026.
The fund noted that while previous concerns centered on trade tensions and policy uncertainty, the current slowdown is largely driven by reduced access to raw materials. This is linked to disruptions in the Strait of Hormuz—a critical global shipping route—and heightened uncertainty surrounding the conflict involving Iran.
Global growth is now projected at 3.1% for 2026, down from the 3.3% forecast in January, and 3.2% in 2027. These figures remain below the long-term average, signaling a more subdued economic outlook.
IMF Managing Director Kristalina Georgieva warned that even under favorable conditions, a quick return to pre-war growth levels is unlikely. Instead, global expansion may settle at a structurally lower pace, well below the 3.7% average recorded between 2000 and 2019.
The IMF also flagged short-term inflation risks, with rising energy costs expected to push prices higher. Inflation forecasts for the United States and the eurozone have already increased, although long-term expectations remain stable.
Global inflation is now expected to reach 4.4% in 2026 before easing to 3.7% in 2027—still above the 2% target commonly set by central banks.
Despite these pressures, the IMF does not currently see major central banks, such as the Federal Reserve or the European Central Bank, facing immediate pressure to tighten policy.
Growth projections for key economies were also revised downward. The eurozone is now expected to grow by 1.1% in 2026 and 1.2% in 2027, while the United States is forecast to expand by 2.3% in 2026 and 2.1% the following year.
Germany’s outlook has also weakened, with growth now projected at 0.8% for 2026, reflecting the heavy impact of rising energy costs on its recovery.
The IMF noted that supply disruptions tied to the Strait of Hormuz have pushed up global oil and gas prices, increasing fuel costs worldwide. In response, Germany has introduced temporary fuel tax cuts, lowering petrol and diesel prices, and is considering additional support measures, including tax-free bonuses for workers.
