The International Monetary Fund has downgraded its global economic outlook and warned of the likelihood of approaching a recession should the conflict in the Middle East become protracted. Rising energy prices and disruptions to global supply chains were cited as the primary contributing factors.

Under its baseline scenario—which assumes a short-lived escalation—the Fund projects global GDP growth of 3.1% in 2026; this represents a downward revision of 0.2 percentage points compared to its January estimate. Concurrently, the average price of oil is forecast at $82 per barrel, compared to current levels of around $100 for Brent crude.

Absent the geopolitical crisis, the Fund estimates that the global economy could have grown at a faster pace—up to 3.4%. This growth would have been bolstered by investments in technology, an easing of monetary policy, and less stringent trade restrictions imposed by the United States.

IMF Chief Economist Pierre-Olivier Gourinchas noted that current events in the Persian Gulf pose a more serious threat to the global economy than Donald Trump’s tariff policies. According to his assessment, if oil prices remain above $100 per barrel through 2027, the risks of a recession would rise significantly.