Middle East war expected to weigh on IMF and World Bank economic forecasts

Sunday 12 April 2026 - 11:30

Global finance leaders are preparing to meet in Washington this week as the ongoing conflict in the Middle East continues to cast uncertainty over the global economy, adding pressure to already fragile recovery prospects.

The International Monetary Fund and the World Bank are expected to revise downward their global growth forecasts while simultaneously raising inflation projections, citing the economic consequences of the war. Officials warn that the impact will be particularly severe for emerging and developing economies.

Rising energy prices, disrupted supply chains, and heightened financial instability are among the main channels through which the conflict is expected to affect global growth. These pressures come on top of earlier shocks from the COVID-19 pandemic and the war in Ukraine, which had already weakened economic stability worldwide.

Before the escalation of the Middle East conflict, both institutions had anticipated a gradual improvement in global economic performance. However, recent developments have reversed those expectations, introducing renewed uncertainty into financial markets.

Emerging economies are projected to face slower growth, higher inflation, and increased debt pressures. Analysts warn that food insecurity could also worsen in vulnerable regions due to rising import costs and supply disruptions.

According to updated projections, growth in developing economies is expected to decline compared to earlier forecasts, while inflation is set to rise significantly, with worst-case scenarios pointing to even sharper increases if the conflict persists.

Economists and policymakers are calling for coordinated international responses, including targeted financial assistance, debt relief measures, and structural reforms to support vulnerable countries.

As global financial leaders gather in Washington, attention will focus on how institutions can respond to overlapping crises and prevent further deterioration of economic conditions in developing regions.