Kristalina Georgieva, the managing director of the International Monetary Fund (IMF), has warned that the global economy is feeling the strain of the Middle East conflict, and that poorer, import‑dependent countries will bear the heaviest burden.
“The impact on the global economy is already large. Even if the conflict is short lived, extensive infrastructure damage and supply chain disruptions are pushing prices up and slowing global growth down from 3.4% last year to 3.1% in 2026.”
Georgieva was speaking on Wednesday at a press briefing during the ongoing IMF/World Bank Spring meetings in Washington DC.
Building on scenarios set out in the IMF’s World Economic Outlook, the IMF boss said assuming a baseline where disruption is limited, growth will slip modestly. But in a more adverse outcome, “we must brace for tough times ahead,” with global growth potentially tumbling to 2%.
The shock, she said is not confined to the Middle East region, with higher energy prices rippling through trade, transport and manufacturing. The negative impacts, she argued, are “highly asymmetric with the biggest burdens falling on countries that import energy and have limited policy space.”
Low‑income and fragile economies, many of them in sub‑Saharan African, are particularly vulnerable. Earlier this week, experts from the Fund said that the war in the Middle East has forced a reassessment of its economic outlook for Africa in 2026 and into 2027.
Two headline figures, she said, capture the scale of the challenge. First, the IMF projects a downgrade in global growth from 3.4% last year to 3.1% in 2026, with the possibility of a fall to 2% in the most adverse scenario.
Second, she highlighted that public debt has climbed to levels that constrain fiscal responses: “Global public debt is on track to bridge 100% of GDP in 2029, a level not seen since the aftermath of World War II.”
These numbers mean governments have less room to cushion households and firms without jeopardising fiscal credibility, she said.
Impact of trade disruption
Trade disruption further weakens the outlook. Disruptions to shipping and energy flows are already producing shortages and price spikes in oil, gas and key petrochemical inputs such as naphtha and fertilisers.
The IMF boss highlighted the risk to food prices if fertiliser deliveries remain constrained, noting that urea prices in some African markets have already doubled from $400 to $800.
“We need to recognise disruptions are not going to evaporate overnight even if the war ends tomorrow. Why? Because a tanker is a slow-moving vessel. It would take 40 days to get all the way to Fiji.”
IMF readies response
Policy advice from the IMF is twofold. For countries with well‑anchored monetary policy and strong credibility, the guidance is to “wait and see” rather than pre-emptively tighten; for others, stronger signals may be necessary.
On fiscal policy the Fund recommends avoiding broad, untargeted measures that can worsen inflationary pressures.
“Untargeted actions will only prolong the pain of high prices,” Georgeiva said.
Instead, policymakers should protect the most vulnerable with targeted support while preserving long‑term fiscal sustainability.
The IMF is also preparing to respond financially and technically.
“We anticipate near‑term demand for IMF financial support to range between $20bn and $50bn,” Georgieva said.
The Fund stands ready to help at least a dozen countries that may seek new arrangements, with several in sub‑Saharan Africa.
Praise for resilient Africa
Still, Georgieva had praise for African countries who continue to exhibit resilience.
“I am impressed by how much countries have done, including countries in sub-Saharan Africa. I was with the African consultative group yesterday and I can tell you the ministers, the central bank governors, didn’t ask for money. They asked for urgent policy advice and for our support to develop further the local currency markets in in Africa.”