WASHINGTON, April 6 - The International Monetary Fund's managing director said the war in the Middle East will result in higher prices and slower global growth, upending a modest upward revision the fund had been preparing for next week's world economic forecast.
Policy outlook and projections
The IMF had expected a small upgrade to its projection for global growth to 3.3% in 2026 and 3.2% in 2027, but the managing director said the conflict changes that trajectory. "Had we not had this war we would have seen a small upgrade of our growth projections. Instead, all roads now lead to higher prices and slower growth," she said.
She added that even if hostilities end quickly and a reasonably rapid recovery follows, the fund would still record a "relatively small" downward revision to its growth forecast along with an upward revision to its inflation forecast. If the fighting is drawn out, the impact on both inflation and growth would be larger, she said.
Requests for support and IMF response
The IMF has already received requests for financing assistance from some countries, although the managing director did not identify them. To address those needs, she said the IMF has the capacity to augment certain existing lending programs.
Context and implications
The comments come in the run-up to the IMF's scheduled update of its global economic outlook. The fund's managing director framed the current conflict as a material factor forcing the institution to revise both its growth and inflation expectations, even under scenarios in which hostilities end early.
Closing
Officials at the IMF signaled readiness to provide additional financing through established programs in response to requests from member countries, while emphasizing that the magnitude of revisions to forecasts will depend on how long the conflict endures.