The war in Iran is darkening the outlook for the global economy. The International Monetary Fund (IMF) now plans to revise its growth forecasts downwards, due to a major energy shock caused by the conflict.
According to IMF Managing Director Kristalina Georgieva, the crisis has led to a decline of approximately 13% in global oil flows and 20% in liquefied natural gas flows. The result: a widespread increase in energy prices and disruptions to supply chains worldwide.
The shock has had uneven effects across different countries. Energy-importing states are particularly exposed, as are economies with limited fiscal space. Sub-Saharan Africa and small island states are among the most vulnerable.
Even with a lasting ceasefire, global growth is expected to slow. Before the conflict, the IMF was considering revising its forecasts upward. Now, even the most optimistic scenario anticipates a downturn.
Faced with this situation, the institution calls on governments to avoid unilateral responses, such as export restrictions or price controls, which could worsen the crisis.
“We cannot get through this ordeal without suffering,” warned Kristalina Georgieva, calling for better international coordination.
With states having limited room for maneuver, managing this energy shock is shaping up to be a major challenge for the global economy in the coming months.
