Accra, April 15, – The International Monetary Fund (IMF) has lowered its global growth projection for 2026 to 3.1 per cent, citing escalating tensions in the Middle East and their impact on trade, energy markets and investment flows.
The Fund said growth could edge up slightly to 3.2 per cent in 2027, assuming the conflict does not worsen, but warned that risks to the outlook remain tilted to the downside.
Presenting the April 2026 World Economic Outlook (WEO) at the IMF/World Bank Spring Meetings, Director of the IMF Research Department, Mr Pierre-Olivier Gourinchas, said the war had disrupted an expected recovery in global economic momentum.
“Despite downside risks, this momentum was expected to carry into 2026. A war in the Middle East has halted this momentum,” he said.
He noted that while global economic activity had ended 2025 on a stronger note than expected, new geopolitical shocks had reversed earlier optimism.
According to the IMF, trade disruptions, volatile energy prices and rising shipping and insurance costs have increased inflationary pressures, especially for energy-importing economies.
The Fund said global inflation is now projected at 4.4 per cent in the baseline scenario, driven largely by higher energy costs and supply chain disruptions.
In a more severe scenario, Mr Gourinchas warned that prolonged conflict and energy supply shocks could push global inflation above 6 per cent, while growth could fall to as low as 2 per cent.
He said governments were already redirecting spending toward defence, creating fiscal pressures and limiting investment in growth-enhancing sectors.
Mr Gourinchas cautioned that the policy environment had become more complex, with central banks facing difficult trade-offs between inflation control and supporting economic activity.
“No central bank can influence global energy prices on its own,” he said, adding that monetary authorities must remain focused on price stability while staying alert to emerging risks.
He recommended that exchange rates be allowed to adjust where necessary, while central banks maintain clear communication and readiness to act decisively.
On fiscal policy, he urged governments to adopt targeted and temporary measures in line with medium-term plans to rebuild fiscal buffers, warning against policies that could further fuel inflation.
He also called for strengthened global cooperation, including efforts to de-escalate conflicts and ensure the stability of critical trade routes such as the Strait of Hormuz.
“If financial conditions tighten sharply… monetary and fiscal policy should be ready to pivot to support the economy and safeguard the financial system,” he said.
The IMF said the outlook remains highly uncertain, with the depth and duration of the Middle East conflict expected to be a key determinant of global economic performance.
GHBUSS
15 April 2026
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