The global economy has so far remained resilient despite the effects of the Middle East war, according to International Monetary Fund Managing Director Kristalina Georgieva.
Higher commodity prices, rising inflation and tighter financial conditions have affected the economic outlook. However, the IMF has not yet identified clear signs of a worldwide slowdown.
IMF Welcomes U.S.-Iran Peace Agreement
Georgieva welcomed the agreement announced on Sunday between the United States and Iran.
The framework aims to end the conflict and reopen the Strait of Hormuz, one of the world’s most important routes for oil shipments.
However, the IMF chief warned that renewed fighting or further supply disruptions would create a significant threat to global economic growth.
Global Economy Remains Resilient
More than three months after the Middle East conflict began, the world economy continues to hold up better than initially feared.
The war has affected commodity prices, inflation expectations and global financial conditions. Nevertheless, these pressures have not yet reached levels that indicate a broad economic slowdown.
The resilience of global activity may influence the IMF’s next economic forecast.
IMF to Update Global Growth Forecast
The IMF is scheduled to publish its updated economic outlook on July 8.
In April, the organization presented three possible scenarios for global GDP growth in 2026 and 2027.
Under its middle adverse scenario, global growth was expected to slow to 2.5% in 2026. Headline inflation was projected to reach 5.4%.
Georgieva said last month that this adverse scenario appeared to be unfolding.
However, her latest assessment suggests that the IMF could move closer to its reference scenario. That outlook assumed the Iran conflict would be relatively short-lived and projected global economic growth of 3.1% in 2026.
Middle East War Raised Global Recession Fears
The proposed peace agreement represents the most significant step yet toward ending the conflict.
The war began with joint U.S. and Israeli strikes against Iran in February. It later expanded into a wider regional confrontation.
Thousands of people were killed, energy markets experienced severe disruption and fears of a global recession increased.
The agreement to end hostilities and restore traffic through the Strait of Hormuz could reduce pressure on energy prices, inflation and global supply chains.
However, Georgieva stressed that the economic outlook remains vulnerable. Any escalation or renewed disruption to energy supplies could quickly weaken global growth prospects.
