IMF Warns of Continued War / How High Will Global Growth Go?

The IMF warned that the continuation of war in the region could push oil prices above $130 a barrel.

According to Ambassador Arjan, Reuters wrote: The International Monetary Fund warned of significant risks to the world's economic growth and financial stability, including the possible end of the investment boom in artificial intelligence, increasing debt and prolonging conflicts in the Middle East.

Although the International Monetary Fund increased its forecast of the growth of the world economy in 2026 from 3% in the estimate of July to 3.1%, however, it announced that the increase in government debt and the possibility of reforming the financial markets could make the global economic outlook darker.

According to the latest report of the world economic outlook of this institution, the growth of the world economy will reach 3.4% in 2027; However, the realization of this forecast depends on the reopening of the Strait of Hormuz by March and the return of sea transportation conditions to pre-war conditions by October 2027.

The International Monetary Fund warned that if the war widens and oil prices remain above $130 per barrel until the end of the first quarter of 2027, world economic growth will decline by half a percentage point next year.

The continuation of conflicts in the Middle East, the disruption of energy supply and the increase in transportation costs have increased the risk of intensifying inflation and slowing down economic growth. In such a situation, central banks may be forced to keep interest rates high for a longer period of time to curb inflation.

On the contrary, investment in artificial intelligence has been one of the main factors supporting the economic growth of the world. However, the International Monetary Fund has warned that a sudden decrease in investment in this area or the failure to realize expectations related to its profitability could endanger financial markets and the global economy.

The increase in government debt and the increase in bond yields are also among other concerns of this institution; Factors that increase the cost of financing, especially for developing countries, and limit the ability of governments to deal with economic shocks.

Overall, the International Monetary Fund has emphasized that the world economy remains vulnerable to the continuation of war, rising energy prices, and instability in financial markets, despite its resistance to recent shocks.