By James Mackintosh

Forecasts for economic growth made three weeks ago by the International Monetary Fund are no longer relevant because the extended war in the Persian Gulf means growth will be lower and inflation higher, Kristalina Georgieva, IMF managing director, said on Monday.

In its widely-followed world economic outlook last month, the IMF presented a "reference" scenario that assumed a quick end to the war. That's now "in the rear view mirror," Georgieva told an audience at the Milken Institute conference in Los Angeles.

In the "adverse" scenario that said now applies, the IMF predicts global GDP growth of 2.5%, down from its 3.1% prior prediction, and inflation of 5.4%, up from 4.4%.

Georgieva criticized policymakers who have tried to cushion the impact on consumers and businesses, as such policies support demand for oil.

"Everyone knows that if your supply shrinks your demand has to follow," she said. "Don't throw gasoline on the fire."

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May 05, 2026 05:01 ET (09:01 GMT)

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