IMF Warns of Global Recession Risk Due to Iran War and Price Shocks

The International Monetary Fund (IMF) has cut global growth projections and warned of a potential recession due to the ongoing Iran war. A top Fed official has also warned of a lasting price shock from the conflict, combined with rising oil prices and Donald Trump's tariffs.

The ongoing Iran war is casting a dark shadow over the global economy, with the International Monetary Fund (IMF) cutting its growth forecasts in response. The organization warned that a prolonged conflict could push the world into a recession, citing the devastating impact on oil prices and global supply chains.

A top Federal Reserve official, Christopher Waller, echoed these concerns, stating that a lasting price shock from the conflict, coupled with higher oil prices and Donald Trump's tariffs, raises the prospect of prolonged inflation . The economic risks posed by the war in the Middle East have already started to materialize in various regions, including Belarus, where the IMF has lowered its growth forecast to 1.2%.

In its latest economic briefings, the IMF also warned that the European Union's economy may 'near recession' if the Middle East conflict persists, with Africa's 2026 growth outlook further reduced to 4.2% amidst a backdrop of falling aid and rising prices.