The International Monetary Fund (IMF) has cautioned that ongoing tensions in the Middle East could significantly impact global economic growth, urging policymakers to act carefully amid rising uncertainty.
Speaking in Washington D.C., IMF Managing Director Kristalina Georgieva highlighted concerns that the conflict is already disrupting supply chains and damaging critical infrastructure across affected regions.
According to the IMF’s latest global economic outlook, global growth is projected to decline from 3.4 percent in 2025 to 3.1 percent in 2026, reflecting mounting geopolitical and economic pressures.
Georgieva warned that prolonged instability, coupled with sustained high oil prices, could further weaken economic performance worldwide and trigger more severe downturn scenarios.
In a worst-case outlook, she said global growth could drop to around 2 percent, as higher energy costs ripple across markets and place additional strain on economies.
The IMF chief noted that the impact of the crisis is not evenly distributed. Energy-importing countries, as well as low-income and fragile economies, are expected to face the most significant challenges due to limited financial buffers.
She advised governments to prioritise macroeconomic stability while carefully implementing support measures for households and businesses affected by external shocks.
Georgieva also encouraged central banks to adopt a cautious, data-driven approach, noting that while some economies may require early policy tightening, others must balance growth concerns with inflation control.
The IMF further highlighted the growing burden of global public debt, projecting that it could exceed 100 percent of global GDP by 2029.
This trend, she said, reflects the cumulative impact of repeated global shocks and underscores the need for balanced fiscal strategies that protect vulnerable populations.
To help countries navigate these challenges, Georgieva confirmed that the IMF is prepared to provide financial assistance ranging from 20 billion to 50 billion dollars through existing and new support programmes.
She added that the Fund is strengthening collaboration with international partners while refining its policy tools to support economic resilience and long-term recovery.
The IMF reiterated its commitment to helping member nations manage uncertainty, rebuild fiscal space, and withstand future global economic shocks.
