IMF warns of mounting pressure as Iran war slows global growth

The global economy is facing mounting pressure from the war involving Iran, with growth slowing and countries expected to seek up to $50 billion in IMF support, as reported by The National and agencies on April 15th.

IMF Managing Director Kristalina Georgieva said the conflict is already disrupting supply chains and increasing inflation, with global growth projected to fall from 3.4% last year to 3.1% in 2026. She warned that if the conflict continues and oil prices remain high, growth could drop to around 2%.

She said the impact is global but uneven, with oil-importing and low-income countries under the most pressure, including many in sub-Saharan Africa, where fuel shortages and rising costs are already being reported.

The IMF expects near-term demand for financial support to range between $20 billion and $50 billion. This would include expansions of its 39 existing programmes, as well as new requests from at least a dozen countries, several of them in Africa, according to Africa News.

Georgieva said the IMF is coordinating with the World Bank, the International Energy Agency and regional partners to respond to the situation. She described the fund as acting as a “firefighter” for its member states as they face economic shocks.

She also warned that supply disruptions linked to the conflict are likely to deepen in the coming weeks, even if fighting eases, due to delays in global shipping and energy deliveries. Shortages of oil, gas, and other materials have already been reported worldwide.

On policy, Georgieva urged governments to focus on maintaining macroeconomic and financial stability. She warned against broad measures such as untargeted subsidies, export controls and tax cuts, saying these could prolong inflationary pressures.

Instead, she called for targeted support for vulnerable groups, alongside careful fiscal management as public debt levels continue to rise. She said repeated global shocks have pushed debt toward levels not seen since the aftermath of the Second World War, limiting governments’ ability to respond.

She also warned that supply disruptions linked to the conflict are likely to deepen in the coming weeks, even if fighting eases, due to delays in global shipping and energy deliveries.

The National and agencies, Africa News and agencies, IMF, Maghrbei.org