The International Monetary Fund (IMF) has warned that the war in the Middle East is delivering a fresh shock to the global economy, undermining a fragile recovery and exposing deep vulnerabilities among energy-importing and low-income nations.
In an assessment released ahead of its flagship reports, the Fund said the conflict is disrupting economic activity across the region while sending ripple effects through global energy and commodity markets, with uneven consequences across countries. “The shock is global, yet asymmetric,” the IMF said, noting that energy importers, poorer economies and countries with limited fiscal buffers are facing the greatest strain.
The conflict has inflicted direct economic damage on affected Middle Eastern economies, including infrastructure losses and disruptions to key industries, which the IMF warned could have lasting consequences even as those economies show resilience. Short-term growth prospects in the region are expected to weaken.
Beyond the immediate zone of conflict, rising energy costs are emerging as the most significant transmission channel. The IMF highlighted the strategic importance of the Strait of Hormuz, through which roughly a quarter to a third of global oil supplies and about a fifth of liquefied natural gas flows.
Large energy importers in Asia and Europe are already absorbing higher fuel and input costs, while several countries in Africa and Asia are struggling to secure adequate supplies even at elevated prices.
The Fund also flagged secondary pressures building across emerging and developing economies, including rising food and fertilizer prices and tightening financial conditions. These dynamics are compounding risks for low-income countries, where food insecurity is increasing and external financial support is becoming more constrained.
“All roads lead to higher prices and slower growth,” the IMF said, outlining scenarios in which either a short or prolonged conflict would sustain upward pressure on energy costs and complicate efforts to contain inflation.
A prolonged disruption, in particular, could keep energy markets tight and weigh heavily on import-dependent economies, while continued geopolitical uncertainty risks prolonging volatility across financial and commodity markets.
The IMF said it is closely monitoring developments and will provide a more comprehensive outlook in its upcoming World Economic Outlook and Global Financial Stability Report on April 14, followed by its Fiscal Monitor on April 15.
