IMF cuts global growth outlook on Iran war energy disruptions
Investing.com -- The International Monetary Fund reduced its growth forecast on Tuesday, citing energy price increases and supply disruptions stemming from the Iran war, and cautioned that the global economy could approach recession if the conflict intensifies and oil prices remain above $100 per barrel through 2027.
The IMF released three growth scenarios at its spring meetings in Washington with World Bank officials, categorized as reference, adverse and severe, based on potential developments in the Middle East conflict.
In its most optimistic reference scenario, which assumes a brief Iran war, the IMF projects 3.1% real GDP growth for 2026, a reduction of 0.2 percentage point from its January forecast. This scenario anticipates oil prices averaging $82 per barrel for 2026, down from recent levels near $100 for Brent benchmark futures.
Without the Middle East conflict, the IMF indicated it would have raised its growth outlook by 0.1 percentage point to 3.4%, supported by continued technology investment, lower interest rates, less severe U.S. tariffs and fiscal support in certain countries.
IMF chief economist Pierre-Olivier Gourinchas told Reuters the war poses a substantially larger risk to the global economy than President Donald Trump's tariffs implemented a year earlier.
"What's happening in the Gulf is potentially much, much larger, and that's what our scenarios are kind of documenting," Gourinchas said.