The International Monetary Fund (IMF) will adjust its forecasts for future global economic developments, if necessary, in light of the new escalation of the situation around Iran. This was announced at a briefing by IMF spokeswoman Julie Kozak.
She recalled that IMF experts assume that “The Strait of Hormuz will begin to open in mid-July“. Another key IMF forecast, Kozak noted, is that the average price of a barrel of oil will be $89.27 this year. “The IMF update of the global economic outlook, published in July, was based on these two assumptions. Of course, we look at the current situation and what is happening in the markets, in the oil markets, in other commodity markets, as well as shipping in the Strait of Hormuz. And we will consider how this could affect the global economy in the long term,” Kozak stressed.
The update to the IMF’s flagship global economic outlook was released on July 8. It was prepared without taking into account comments by US President Donald Trump in Ankara on Wednesday that he effectively considered the memorandum of understanding with Iran, which helped end large-scale military action in the Middle East, invalid. The United States subsequently resumed large-scale strikes against Iran.
The IMF study forecasts global GDP growth of 3% this year and 3.4% next year. Risks to the global economic growth outlook appear “more balanced than in April, but still pose risks to moderation,” IMF experts warned. They noted that a serious factor is the potential for renewed conflict in the Middle East, which threatens with “prolonged volatility in commodity prices, further supply chain disruptions, higher prices and impacts on financial conditions“. Renewed escalation of geopolitical tensions could harm growth and increase inflationary pressures, the IMF acknowledged.