IMF cuts global growth outlook amid MidEast war risks

The International Monetary Fund has lowered its global growth forecast, warning that the Middle East conflict could disrupt the world economy by pushing up energy prices and straining supply chains.

In its latest World Economic Outlook, the IMF projected global growth at 3.1 percent, down from 3.3 percent forecast earlier this year before the war between the United States, Israel, and Iran escalated.

The conflict has driven up prices of oil, gas and fertilizers, largely due to disruptions in the Strait of Hormuz, a critical route for global energy shipments. Inflation is now expected to reach 4.4 percent this year.

The IMF warned that if the crisis continues, global growth could slow sharply to around 2 percent, a level seen only during major economic shocks.

Emerging and developing economies are expected to be hit the hardest, facing rising food and energy costs. Growth forecasts for the Middle East have also been significantly reduced.

Projections for major economies including the United States, China and Europe were slightly downgraded, reflecting growing uncertainty.

The IMF added that prolonged high energy prices could lead to more persistent inflation, potentially forcing central banks to raise interest rates and further slow economic growth.