The International Monetary Fund has downgraded its global growth outlook, warning that an escalation in the Iran war could push the world economy close to recession.
The IMF said rising oil prices and supply disruptions are already weighing on economic activity. In its baseline scenario, global growth is projected at 3.1% in 2026, lower than earlier estimates.
However, under a prolonged conflict scenario, growth could fall to 2.5%, and in a severe case, drop to 2%, nearing recession levels.
BREAKING: The U.K. will suffer the biggest hit to growth of all of the world’s richest economies because of the Iran war, the International Monetary Fund warned on Tuesday.
— CNBC International (@CNBCi) April 14, 2026
In its latest World Economic Outlook, the IMF projected that the U.K. economy will now grow by just 0.8%… pic.twitter.com/tg1xObGkL7
According to IMF chief economist Pierre-Olivier Gourinchas, the current crisis poses a greater threat than earlier U.S. tariff shocks. Sustained high oil prices could also drive inflation higher, forcing central banks to tighten policy.
Emerging markets and Middle Eastern economies are expected to be hit hardest. The IMF warned governments against broad subsidies, urging targeted measures to manage rising energy costs.
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TIPP Staff
