IMF warns Iran war disruptions could push global economy into risk zone

Washington (TIP): The International Monetary Fund (IMF) has warned that prolonged disruptions arising from the ongoing Iran war are increasing the risk of a slowdown in the global economy, with rising inflation and tighter financial conditions threatening growth prospects worldwide.
Speaking on Thursday, IMF spokesperson Julie Kozack said the conflict-driven disruptions, particularly in global energy markets, are pushing the world economy closer to what the Fund described as an “adverse scenario.”
“The longer the disruptions continue, the greater the risks become for global growth and price stability,” Kozack said during a media briefing in Washington.
The IMF said the adverse scenario could include weaker economic growth, elevated inflation, tighter credit conditions and increased volatility in financial markets. The warning comes as tensions in the Middle East continue to disrupt oil supplies and shipping routes, especially around the strategically important Strait of Hormuz.
According to the IMF, global growth projections could face downward pressure if energy prices remain high for an extended period. Higher oil and commodity prices are already raising concerns among policymakers and central banks struggling to keep inflation under control after years of economic uncertainty.
The Fund noted that while financial markets remain relatively stable for now, persistent geopolitical tensions could quickly change investor sentiment and increase borrowing costs globally.
The Iran conflict has triggered widespread concerns over supply chain disruptions and energy security, with several countries already reporting increased import costs. Analysts say developing economies dependent on fuel imports may face the biggest impact if crude oil prices continue to surge.
The IMF’s warning also comes amid growing fears that continued instability in the Middle East could slow trade, weaken consumer demand and delay investment activity across major economies.
Global financial institutions and governments are closely monitoring the situation as concerns mount over the broader economic fallout of the conflict.