The blog was written by IMF senior leadership, including Jihad Azour, Nigel Chalk, Alfred Kammer, Abebe Aemro Selassie, and Krishna Srinivasan, directors of the Fund’s five area departments.
It also includes contributions from Pierre-Olivier Gourinchas, Director of the Research Department, Tobias Adrian, Director of the Monetary and Capital Markets Department, and Rodrigo Valdés, Director of the Fiscal Affairs Department.
Energy shock at the core
The IMF blog highlighted energy markets as the main transmission channel of the crisis, with disruptions to flows through the Strait of Hormuz triggering what it describes as a historic shock to global oil supply.
Around 25–30 percent of global oil and 20 percent of liquefied natural gas (LNG) pass through the strait, amplifying the impact on major importing regions in Asia and Europe.
For energy-importing economies, the surge in fuel costs is effectively acting as a sudden tax on income, straining fiscal balances and widening external deficits.
While oil exporters in parts of the Middle East, Africa, and Latin America may benefit from higher prices, gains remain uneven, particularly for countries facing export constraints or heightened geopolitical risks.
Trade routes and supply chains under pressure
According to the IMF, the war is also reshaping global trade flows.
Shipping routes are being rerouted, increasing freight and insurance costs and delaying deliveries, while air-traffic disruptions around major Gulf hubs are weighing on tourism and logistics.
The crisis is spilling into food markets as well, with about one-third of global fertilizer trade passing through the Strait of Hormuz, raising concerns over rising food prices, particularly as planting seasons begin in the Northern Hemisphere.
Low-income countries are most exposed, with food accounting for around 36 percent of household consumption, making price spikes especially severe.
Inflation risks resurface globally
The IMF warned that persistently high energy and food prices could fuel renewed inflationary pressures worldwide.
Historically, sustained oil price shocks have led to higher inflation and weaker growth, as rising transport and production costs feed into consumer prices.
The impact varies across regions, with Asia and Latin America facing pressure from higher import costs, Europe confronting renewed cost-of-living strains, and low-income countries bearing the heaviest social and economic burden.
Financial markets tighten
The blog also noted that global financial markets have been unsettled.
Stock prices have declined, while bond yields have risen across advanced and emerging economies, tightening financial conditions.
For many emerging and low-income economies, this means higher borrowing costs, increased debt-servicing burdens, and reduced access to financing—particularly as higher import bills widen trade deficits and pressure currencies.
Uneven global impact
The IMF underscored that the shock is global but highly asymmetric.
Energy importers, poorer countries, and those with limited financial buffers are bearing the brunt of the الأزمة, while some commodity exporters may see short-term gains.
At the same time, the war is hitting economies that had only recently begun recovering from previous crises, dimming growth prospects and increasing uncertainty.
Outlook: higher prices, slower growth
The IMF concluded that the trajectory of the global economy will depend on the duration and spread of the conflict, as well as the extent of damage to infrastructure and supply chains.
However, most scenarios point to the same outcome: higher prices and slower global growth.
The IMF said it will provide a more comprehensive assessment in its upcoming World Economic Outlook and Global Financial Stability Report in mid-April, alongside its Fiscal Monitor.
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