IMF: Continued West Asia war will create much worse conditions for global economy

Pars Today — The Managing Director of the International Monetary Fund (IMF) stated that if the war in West Asia continues until next year (2027), the global economy will face much worse conditions.

Kristalina Georgieva, the Managing Director of the IMF, said on Monday that the Fund’s previous forecast—that the U.S. and Israeli war against Iran would cause only a slight global economic slowdown and a moderate rise in prices—is no longer valid. 

According to Pars Today, quoting IRNA, Georgieva warned: “If the war continues into 2027 and oil prices reach $125 per barrel, we should expect a much worse outcome for the global economy.”

On the other hand, the Spanish newspaper El País wrote that the lack of progress in U.S.–Iran negotiations, the continued closure of the Strait of Hormuz, and Washington’s ongoing “suicidal” strategy have increased the risk of global economic collapse. As global reserves are running out and the world is gradually being deprived of this vital route for transporting oil and gas, oil prices have reached their highest level since 2022, and the likelihood of a global recession—especially in Europe—is increasing.

The Spanish newspaper wrote that the growing instability around the Strait of Hormuz, following the American–Israeli military attack on Iranian territory—through which one‑fifth of the world’s oil, particularly for Asian countries, is supplied—is enough to raise energy prices, weaken currencies, increase inflation, and place pressure on public finances throughout the region.

The report adds that for Asian economies heavily dependent on trade, geopolitical shocks are no longer just external events; they now directly threaten domestic economic stability. This is not merely an energy‑security problem—it shows that globalization itself has entered a more unstable phase.