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As treasurer Jim Chalmers weighs ‘extreme uncertainty’, one economic scenario sees global growth plunging to just 2% in 2026Get our breaking news email, free app or daily news podcastThe International Monetary Fund has warned the US-Israel war on Iran risks creating an “energy crisis of an unprecedented scale” that could tip the global economy towards recession.The grim warning contained in the IMF’s latest World Economic Outlook comes as Jim Chalmers prepares to attend the organisation’s spring meetings in Washington DC this week, where he said he would be “joining with other countries continuing to call for an enduring end to the war”. Continue reading...

• Finance ministers and central bank governors gathered in Washington for IMF and World Bank Spring Meetings are confronting an unprecedented global energy shock caused by the Iran war and Strait of Hormuz closure, according to IMF Managing Director Kristalina Georgieva. • Georgieva warned that "there will be no neat and clean return to the status quo ante," indicating long-term economic impacts regardless of ceasefire outcomes or efforts to reopen shipping routes. • The energy crisis is already affecting hundreds of millions of people globally, with decisions made at the meetings regarding resource allocation and emergency funding expected to have tangible impacts on livelihoods in the coming weeks.

Kristalina Georgieva says even ‘most hopeful scenario’ will lead to growth downgrade and cause permanent hit to living standardsBusiness live – latest updatesThe 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 threatens to unravel, Kristalina Georgieva said the “scarring effects” caused by the war to date would mean slower global growth this year than first anticipated. Continue reading...

Analysis shows they are reliant on market investors such as hedge funds, which contributed $4tn last yearBusiness live – latest updatesEmerging economies are at greater risk of higher interest rates and currency shocks as a result of the Iran war because of increased reliance on market investors such as hedge funds, the International Monetary Fund has warned.The IMF’s analysis shows that a cumulative $4tn flowed into emerging markets last year from outside the formal banking sector – including from hedge funds and investment funds. Continue reading...

• The International Monetary Fund's Executive Board concluded its 2026 Article IV Consultation on April 2, stating there is "little room to cut interest rates in 2026" despite moderating inflation expectations. • The IMF projects U.S. GDP growth will reach 2.4% in 2026, up from 2.0% in 2025, while the federal funds rate is forecast to decline only from 3.6% to 3.4% — representing barely a single rate cut for the entire year. • Inflation is on track to hit the 2% target by early 2027, but the IMF warns that growth will peak this year and slowly decay toward 1.8%, while U.S. debt continues climbing annually.

Washington-based fund says rising energy and food costs will hit economies worldwide and could leave lasting scarsThe International Monetary Fund has warned that “all roads lead to higher prices and slower growth worldwide” should the conflict in the Middle East continue to throttle the amount of oil, gas and fertiliser making its way out of the Gulf.In a stark message that countries on all continents will be affected, the Washington-based organisation said a rise in energy and food costs would harm economic growth this year and could leave lasting scars on the global economy. Continue reading...