IMF Warns Iran War Will Scar Global Economy

IMF Managing Director Kristalina Georgieva Warns Iran Conflict Will Scar Global Economy

The head of the International Monetary Fund (IMF) has warned that the Iran war will leave a permanent scar on the global economy, even if a durable peace agreement is reached.

Georgieva said the conflict has already created “scarring effects” that will weigh on global growth and result in a downgrade to economic forecasts for next year. She added that there would be “no neat and clean return to the status quo.”

The IMF official made these remarks ahead of the upcoming spring meetings, noting high uncertainty over energy supplies and global trade routes.

She highlighted risks linked to continued disruption in shipping through the Strait of Hormuz, a key route for oil and gas transport. Recovery in energy infrastructure could take time, she said, with oil-importing and developing economies expected to be among the hardest hit by economic fallout.

Georgieva urged countries to avoid protectionist measures such as export restrictions, warning that such actions could further destabilise global conditions. She also called for targeted support for vulnerable groups and warned against broad tax cuts or subsidies that could strain public finances.