{"id":318791,"date":"2026-04-15T01:55:54","date_gmt":"2026-04-14T20:25:54","guid":{"rendered":"https:\/\/ebiztoday.news\/?p=318791"},"modified":"2026-04-15T01:55:54","modified_gmt":"2026-04-14T20:25:54","slug":"iran-war-fallout-has-abruptly-darkened-global-economic-outlook-imf-says-national","status":"publish","type":"post","link":"https:\/\/ebiztoday.news\/index.php\/2026\/04\/15\/iran-war-fallout-has-abruptly-darkened-global-economic-outlook-imf-says-national\/","title":{"rendered":"Iran war fallout has \u2018abruptly darkened\u2019 global economic outlook, IMF says – National"},"content":{"rendered":"

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The fallout from the Middle East conflict sparked by the war with Iran has \u201cabruptly darkened\u201d the worldwide economic outlook, the International Monetary Fund said Tuesday while warning of lower growth compared with 2025.<\/p>\n

The IMF downgraded its forecast for global growth to three.1 per cent in 2026 from the three.3 per cent it had forecast in January. That\u2019s also down from the three.4 per cent expansion seen last 12 months.<\/p>\n

That modest 0.2 per cent downgrade is predicated on the belief of \u201ca short-lived conflict,\u201d IMF economic counsellor Pierre-Olivier Gourinchas wrote within the report.<\/p>\n

\u201cThe worldwide outlook has abruptly darkened following the outbreak of war within the Middle East\u201d greater than a month ago, he said, which \u201cinterrupted what had been a gentle growth trajectory\u201d and upended a planned upgrade to the IMF forecast.<\/p>\n

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\u201cThe duration and scale of the conflict and the time it can take for energy production and transit to normalize after the tip of hostilities will determine the final word size of the shock to the worldwide economy,\u201d Gourinchas added.<\/p>\n

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Although a fragile two-week ceasefire stays in effect, negotiations to finish the war haven’t yet yielded a peace agreement, raising fears attacks could resume.<\/p>\n

U.S. and Israeli strikes on Iran \u2014 and Tehran\u2019s closing of the Strait of Hormuz and retaliatory strikes on oil refineries and other energy infrastructure in neighbouring countries \u2014 have driven oil and gas prices sharply higher all over the world.<\/p>\n

Because of this, the IMF marked up its expectation for global inflation this 12 months to 4.4 per cent from 4.1 per cent in 2025 and from the three.8 per cent it had forecast for this 12 months in January.<\/p>\n

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The souring outlook from the IMF comes lower than two weeks after Deloitte Canada also downgraded its growth forecast for the Canadian economy to 1.2 per cent for 2026 \u2014 down from the 1.5 per cent estimated in January, in addition to last 12 months\u2019s 1.7 per cent gain.<\/p>\n

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The IMF forecast for Canada is more optimistic, predicting 1.5 per cent growth this 12 months, down just 0.1 percentage points from its January forecast. Each the January report and Tuesday\u2019s update predict a 1.9 per cent expansion in 2027.<\/p>\n

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The USA economy continues to be expected to grow by 2.3 per cent in 2026, which the IMF says is on account of fiscal policies and rate of interest cuts last 12 months.<\/p>\n

That forecast can also be downgraded 0.1 percentage points from January, reflecting what the report calls a \u201csmall net negative effect\u201d from the war with Iran, given the U.S. exports more oil and gas than it brings in from overseas markets in comparison with other nations.<\/p>\n

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Still, the IMF notes that inflation stays above the U.S. Federal Reserve\u2019s goal of two per cent, sitting above three per cent in essentially the most recent data.<\/p>\n

\u201cI feel that they probably overreacted, but we\u2019ll see,\u201d U.S. Treasury Secretary Scott Bessent told reporters concerning the IMF report.<\/p>\n

He said he was confident that the U.S. would cycle through higher prices in a short time, unlike countries that were implementing subsidies that would increase borrowings or lengthen the duration of inflationary impacts.<\/p>\n

The IMF report was more pessimistic in downgrading its forecast for the emerging market and developing economies to three.9 per cent from its view of 4.2 per cent in January.<\/p>\n

The report cited higher food and energy prices that can have a greater impact on those countries, which include much of Asia, Latin America and Africa, and even large economies like China and India.<\/p>\n

One winner that\u2019s emerging from the Middle East conflict is Russia, an energy exporter that stands to profit from higher prices. The IMF upgraded its forecast for the Russian economy, hard hit by sanctions following the invasion of Ukraine in 2022, to a still-modest 1.1 per cent from 0.8 per cent in January.<\/p>\n

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