IMF warns global growth may slow to 3.1%
By Usman Yahaya Ismail
Global economic recovery is facing fresh uncertainty following renewed tensions in the Middle East, with the International Monetary Fund (IMF) warning of a potential slowdown in growth if the crisis persists.
According to the IMF, even if the conflict does not escalate significantly, global economic growth is projected to weaken to 3.1% in 2026, reflecting mounting pressure on international markets.
However, the Fund cautioned that a prolonged or intensified conflict could further disrupt energy supplies, pushing global growth down to as low as 2%. Inflation could also rise sharply, exceeding 6% by 2027.
The warning comes amid a surge in global oil and gas prices following military tensions involving the United States, Israel, and Iran. The situation has been further complicated by Iran’s closure of the Strait of Hormuz, a critical global shipping route for crude oil, heightening concerns over supply disruptions.
Despite the uncertainty, the IMF identified several economies expected to maintain relative growth momentum.
India remains the fastest-growing major economy, with projections of 6.5% growth in 2026. The IMF attributes this resilience to earlier economic reforms and strong domestic demand.
China’s growth outlook, however, has been slightly revised downward due to ongoing global trade tensions and internal challenges in its property sector. Growth is now projected at 4.4% in 2026, with a steady 4% outlook for 2027.
Nigeria is also expected to record moderate growth of 4.1%, although the IMF slightly reduced its earlier forecast due to global economic pressures. As Africa’s largest oil exporter, Nigeria has been affected by rising fuel prices linked to the Middle East crisis.
Data from the National Bureau of Statistics shows inflation increased from 15.06% in Feb. to 15.38% in March, with food inflation also rising significantly.
Saudi Arabia, another major oil exporter, is projected to benefit from higher global energy prices. However, the IMF noted that ongoing instability in the Middle East continues to create uncertainty for the region’s overall economic outlook.
The IMF emphasized that while oil-producing nations may see short-term gains from rising prices, the broader impact of the conflict poses serious risks to global economic stability.