IMF: Middle East shock 'baked' in
The IMF warned that the economic shock from the Middle East war is already embedded in global growth forecasts and could have multi‑year effects on prices and food insecurity. Officials say the conflict’s damage will complicate deliberations at the IMF and World Bank meetings and increase pressure on emerging‑market financing conditions. (reuters.com) (cbsnews.com)
The International Monetary Fund says the Middle East war has already knocked the world economy off course, and the damage is now built into its forecasts. (aol.com) Kristalina Georgieva said on April 12 that 13% of global oil flows and 20% of gas flows had been “stuck for five weeks and counting,” pushing up energy costs far beyond the region. She said the hit is uneven, with countries near the war zone, oil importers, and states with thin reserves taking the hardest blow. (cbsnews.com) That marks a sharp turn from January, when the International Monetary Fund projected global growth of 3.3% in 2026 and 3.2% in 2027 and said the world economy was showing resilience. Reuters reported that, before the war began on February 28, the fund and the World Bank had expected to raise those forecasts. (imf.org) (aol.com) The pressure is showing up first in fuel, transport, fertilizer and industrial gases such as helium, which Georgieva said are already in short supply. She pointed to energy rationing in India, a national energy emergency in the Philippines, and supply strains hitting semiconductor production and medical imaging. (cbsnews.com) The World Bank’s baseline now puts 2026 growth in emerging markets and developing economies at 3.65%, down from 4% in October 2025. In a longer-war scenario seen by Reuters, that falls to 2.6%, while inflation in those economies rises to 4.9% in the baseline and as high as 6.7% in the worst case. (gmanetwork.com) Food is a second channel of damage. Reuters reported that the International Monetary Fund warned about 45 million additional people could face acute food insecurity if the conflict keeps disrupting fertilizer shipments during planting season. (aol.com) The financing strain is rising at the same time. Georgieva said on April 9 that the fund now expects near-term demand for emergency support from low-income and energy-importing countries to reach $20 billion to $50 billion. (usnews.com) That leaves this week’s International Monetary Fund and World Bank spring meetings in Washington focused less on inflation cooling and more on crisis management. Georgieva’s message on April 12 was that even a peace deal would not quickly reverse the shock, because damaged infrastructure will take time to restore. (aol.com) (cbsnews.com)
