Gate News message, April 15 — The International Monetary Fund (IMF) cut its global growth outlook on April 14 due to Middle East war-driven energy price spikes, presenting three scenarios: weaker, worse, and severe. Under the worst-case scenario, the global economy teeters on the brink of recession, with oil prices averaging $110 per barrel in 2026 and $125 in 2027. The IMF’s reference forecast assumes a short-lived conflict with oil prices normalizing in the second half of 2026, averaging $82 per barrel for the year, well below the April 14 Brent crude price of around $96.
IMF Chief Economist Pierre-Olivier Gourinchas said the outlook may already be outdated, noting that continued energy disruptions and no clear path to end the conflict suggest the “adverse scenario” looks increasingly likely. That middle path envisions a longer conflict keeping oil prices around $100 per barrel in 2026 and $75 in 2027, with global growth falling to 2.5% this year from 3.4% in 2025. The severe scenario assumes an extended conflict with oil prices at $110 in 2026 and $125 in 2027, slashing global growth to 2%, close to a global recession.
The IMF shaved its U.S. growth outlook for 2026 to 2.3%, down 0.1 percentage point from January, reflecting tax cuts and AI investment partly offsetting higher energy costs. The euro zone’s growth outlook fell 0.2 percentage points in both years to 1.1% in 2026 and 1.2% in 2027. China’s growth for 2026 is forecast at 4.4%, down 0.1 point, with 2027 growth at 4.0%. India saw upgrades to 6.5% for both 2026 and 2027.
Emerging markets and developing economies take a bigger hit from the conflict, with the Middle East and Central Asia region seeing 2026 GDP growth fall by two full percentage points to 1.9% amid infrastructure damage and curtailed energy exports. The IMF cautioned governments against fuel subsidies or price caps to ease higher energy prices, warning these could lead to fuel shortages in other countries and disrupt fiscal frameworks needed to rebuild fiscal buffers.
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