The warning comes as President Donald Trump announced the U.S. ceasefire and peace process with Iran is “over.”
Kathryn Carlson
U.S. President Donald Trump said Wednesday that the U.S. ceasefire and peace process with Iran is “over” after the Pentagon launched major retaliatory strikes overnight.
The economic shocks of a renewed Middle East conflict “would propagate through a further increase in commodity prices and extended volatility, supply shortages, and exchange rate pressures,” the IMF said.
Countries’ oil stocks are depleted after governments released them during the early months of the conflict, meaning stocks “could reach stress levels should supply disruptions persist or hoarding gather steam,” the update stated.
Actions by individual countries to shore up their supply could “further amplify global price pressures,” the IMF said.
Food insecurity could “worsen materially” if disruptions in fertilizer and energy markets continue, especially in low-income countries in South Asia and sub-Saharan Africa, while higher food and energy prices “could heighten the risk of social unrest and domestic political instability,” particularly in vulnerable economies, it said.
Overall global growth is projected to be 3 percent in 2026 and 3.4 percent in 2027, while headline inflation is expected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before declining to 3.9 percent in 2027, the update stated.
