Washington: The International Monetary Fund has lowered its global growth forecast for 2026 and warned that the world economy could move closer to a recession if the conflict involving Iran worsens.
In its latest assessment, the IMF said global growth is now expected to reach about 3.1 percent this year, down from earlier estimates. It added that if the situation becomes more serious, growth could fall further to around 2.5 percent. In a worst case scenario, growth may drop close to 2 percent, a level often linked with global recession conditions.
The downgrade comes mainly due to rising tensions linked to the Iran conflict, which has disrupted energy markets. The crisis has affected oil shipments passing through the Strait of Hormuz, one of the most important routes for global oil supply.
As a result, oil prices have increased and may continue to rise depending on how the situation develops. The IMF warned that higher energy prices are pushing up inflation across many countries. This is making everyday goods more expensive and increasing pressure on households and businesses.
The report said inflation could rise significantly in the coming months if the conflict continues. This may force central banks to keep interest rates high or raise them further, which could slow down economic activity.
The impact is not the same everywhere. Countries that depend heavily on imported energy, especially in Europe and parts of Asia, are expected to face stronger economic pressure. Emerging economies are also likely to see slower growth, particularly those that rely on oil imports.
At the same time, some countries such as the United States and India are expected to remain more stable, supported by strong domestic demand and investment. However, the IMF warned that no region will be fully protected if the crisis deepens.
The situation has also affected global confidence, with businesses becoming more cautious and investment decisions slowing down. Trade and supply chains could face further disruptions if tensions continue.
The IMF said its current forecast may already be under pressure as the situation remains uncertain. It stressed that the global economy is moving closer to a weaker outlook and urged policymakers to remain alert.
The warning highlights how quickly geopolitical tensions can affect economic stability. The IMF said the path ahead will depend largely on whether the conflict eases or escalates in the coming months.