STORY: :: The Middle East war means that ‘all roads’ lead to higher prices and slower growth, says the IMF chief
:: Washington, D.C. / April 6, 2026
:: Kristalina Georgieva, IMF Managing Director
“Had we not had this war, we would have seen one small upgrade of our growth projections. Instead, all roads now lead to higher prices and slower growth.// Oil supply has shrunk by 13%. So we have a significant impact from oil, from gas, and from the interruption of supply chains from fertilizers to helium. Second, the impact is global. Everybody around the planet feels it. Energy importers feel it a lot. Now, even energy exporters, countries in the Gulf, Iraq, they also feel the impact.”
The war has triggered the worst-ever disruption in global energy supply in history, with millions of barrels of oil production shuttered due to Iran’s effective blockage of the Strait of Hormuz, crucial for shipping one-fifth of the world’s oil and gas. Even if the conflict is swiftly resolved, the IMF is set to reduce its forecasts for economic growth and bump up its outlook for inflation, Kristalina Georgieva, managing director of the IMF, said.
The IMF is expected to release a range of scenarios in its upcoming World Economic Outlook due on April 14. It signaled a possible downgrade in a March 30 blog post, citing the asymmetric shock of the war and tighter financial conditions. Without the war, the IMF had expected a small upgrade in its projection for global growth of 3.3% in 2026 and 3.2% in 2027.
The war has shrunk global oil supply by 13%, Georgieva said, rippling through oil and gas shipments and into related supply chains such as helium and fertilizers.
Even a rapid end to hostilities and a fairly rapid recovery will result in a “relatively small” downward revision of the growth forecast and an upward revision of its inflation forecast, she said. If the war is protracted, the effect on inflation and growth will be greater.
The war is expected to dominate the IMF-World Bank spring meetings in Washington next week, with finance officials flying in from around the world.
Poor, vulnerable countries with no energy reserves will be hardest hit, Georgieva added, noting that many countries had little to no fiscal space to help their populations weather the price increases caused by the war.