The International Monetary Fund (IMF) Managing Director Kristalina Georgieva warned of prolonged damage to the global economy from the Iran war. The institution plans to downgrade its global growth forecasts due to the conflict, Euronews reported.
Georgieva said that even in the best-case scenario, higher energy costs, infrastructure damage, supply disruptions and weaker market confidence will weigh on global growth. IMF research shows that output in war-affected countries initially fell by about 3% and continues to decline for years.
The IMF is prepared to provide between $20 billion and $50 billion in emergency balance-of-payments support to affected countries, depending on the outcome of the ceasefire and subsequent negotiations. It also warned that at least 45 million people face food insecurity as a result of the conflict.
Meanwhile, World Bank President Ajay Banga said the institution could quickly mobilize $25 billion for developing countries, with up to $60 billion available over time.
The comments came as the IMF and World Bank opened their Spring Meetings in Washington. The U.S. and Israel’s war against Iran, which began on Feb. 28, has disrupted supply chains and pushed oil prices higher after Iran restricted access to the Strait of Hormuz.
The World Bank now forecasts 1.8% growth in the Middle East (excluding Iran) in 2026, downgrading from earlier projections. Global inflation is also expected to rise due to higher energy prices and supply disruptions.
