War darkens global economic outlook and reshapes policy priorities
Baku, April 15, AZERTAC
Despite major trade disruptions and policy uncertainty, last year ended on an upbeat note, according to the official website of the IMF. The private sector adapted to a changing business environment, while powerful offsets came from lower US tariffs than originally announced, some fiscal support, and favorable financial conditions coupled with strong productivity gains and a tech boom. Despite some downside risks, the momentum was expected to carry over into 2026, lifting the pre-conflict global growth forecast to 3.4 percent.
War in the Middle East has halted this momentum. The closing of the Strait of Hormuz and serious damage to critical facilities in a region central to global hydrocarbon supply raise the prospect of a major energy crisis should hostilities continue.
Our reference forecast, which assumes a short-lived conflict and a moderate 19 percent increase in energy commodities prices in 2026, still puts global growth at only 3.1 percent this year and headline inflation at 4.4 percent, a sharp deviation from the global disinflation trend in recent years.
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