IMF lowers world economic growth forecast, Middle East conflict impacts increase uncertainty

New York, April 14 (Xinhua) -- The International Monetary Fund (IMF) released its latest World Economic Outlook report on the 14th, lowering its forecast for world economic growth this year by 0.2 percentage points to 3.1%. The IMF pointed out that the downward adjustment of global economic growth expectations mainly reflects the impact of the Middle East conflict, but some negative effects have been offset by recent strong data and tariff rate reductions.

The report points out that with the impact of the Middle East conflict subsiding by the middle of this year, the world economy is expected to grow by 3.1% this year, a 0.2 percentage point decrease from the January forecast. The global inflation rate will rise to 4.4%, an increase of 0.3 percentage points from 2025. If the war and high oil prices continue for a longer period of time, the world economic growth rate will drop to 2.5% this year, and the global inflation rate will climb to 5.4%. In extreme cases, the world economic growth rate may drop to 2% this year.

The report lowered the economic growth expectations for the United States and the Eurozone this year by 0.1 and 0.2 percentage points, respectively, to 2.3% and 1.1%; The economic growth forecast for emerging markets and developing economies this year has been lowered by 0.3 percentage points to 3.9%; Net energy importing countries in the Middle East conflict zone, as well as emerging markets and developing economies, will be more significantly affected. The economic growth forecast for the Middle East and Central Asia region this year has been significantly lowered by 2 percentage points to 1.9%.

The report suggests that if inflation expectations continue to rise in the medium to long term, restoring price stability must be prioritized over short-term economic growth, and therefore, rapid tightening of monetary policy is needed.

The report points out that although the world economy may become more multipolar, it is necessary to avoid the trend of fragmentation. While each country takes measures separately, global cooperation should continue to be strengthened, including the rapid cessation of hostilities and the reopening of the Strait of Hormuz. Only by formulating the right policies can the economic damage caused by war be reduced.