WASHINGTON: The International Monetary Fund warned on Thursday that continuing disruptions due to the Iran war meant its global economic outlook was moving towards an “adverse” scenario, with growth pared down and greater risks to inflation.
Last month, the multilateral lender’s World Economic Outlook predicted global growth would drop to 3.1 percent in 2026 in its “reference” scenario, but warned of a bleaker outlook if the war were to drag on.
In the “adverse” scenario, where oil prices remain higher for longer, inflation expectations become less stable and financial conditions tighten, growth would slow to 2.5 percent, the Fund said at the time. On Thursday, the Fund’s chief spokesperson said the global economy was headed towards this less auspicious situation.
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