IMF and World Bank to Downgrade Global Growth Forecasts Amid Middle East War

Key Points

• IMF and World Bank will downgrade global growth forecasts and raise inflation predictions due to the Middle East war
• Emerging markets and developing countries will be hardest hit by higher energy prices and supply disruptions
• This is the third major economic shock after the COVID pandemic and Russia's invasion of Ukraine

Full Details

Top finance officials from around the world are convening in Washington this week under the shadow of the war in the Middle East, which has delivered a third major shock to the global economy after the COVID pandemic and Russia's invasion of Ukraine. IMF and World Bank officials announced they will downgrade their forecasts for global growth and raise their inflation predictions as a result of the war, warning that emerging markets and developing countries will be hit hardest by higher energy prices and supply disruptions. The meetings come as a tentative cease-fire in the Middle East sparked a rally in stocks and a sharp drop in oil prices, though some investors fear these market moves are premature. The IMF and World Bank are also signaling their readiness to support countries hit hard by the war in an effort to reassure markets.