Kristalina Georgieva says even ‘most hopeful scenario’ will lead to growth downgrade and cause permanent hit to living standards
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The head of the International Monetary Fund has warned that the Iran war will permanently scar the global economy even if a durable peace deal in the Middle East can be reached.
In a speech delivered as the ceasefire in the conflict threatened to unravel, Kristalina Georgieva said the “scarring effects” caused by the war to date would mean slower global growth this year than first anticipated.
Had it not been for the outbreak of the conflict six weeks ago, the IMF would have upgraded its global growth outlook for 2026, Georgieva said. “But now, even our most hopeful scenario involves a growth downgrade. Even in a best case, there will be no neat and clean return to the status quo.”
