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IMF to Cut Global Growth Outlook as Iran War Disrupts Trade and Prices

The shift reflects supply shocks from the conflict that could strain fragile, import‑dependent countries.

Overview

  • IMF chief Kristalina Georgieva said the Fund will lower its world growth forecast at the upcoming spring meetings.
  • She linked the downgrade to war damage and jammed trade routes that have pushed up oil, gas, and other key commodity prices.
  • Shipping through the Strait of Hormuz was briefly reopened under a two‑week weapons pause, while Red Sea traffic via Bab al‑Mandab remains about half of 2023 levels.
  • The IMF expects demand for short‑term emergency loans of $20–$50 billion and says it can meet that need to keep vulnerable countries solvent.
  • The Fund warned that at least 45 million people could face hunger as higher fuel and fertilizer costs hit low‑income, energy‑importing nations and remote island states.