The International Monetary Fund (IMF) has warned that the ongoing war in the Middle East would push up prices and weaken economic growth, with the poorest countries bearing the brunt of the shock.
For fuel-importing countries, the effect is direct, raising costs for governments, businesses and households. Several economies in Africa, Asia and Latin America are already struggling to secure supplies at higher prices.
While oil exporters may benefit from price increases, the IMF noted that gains are uneven, particularly where exports are constrained. It added that prolonged uncertainty could weaken investment and slow growth even in producing countries.
Beyond energy, the conflict is disrupting global supply chains. Rerouting of ships away from conflict zones has increased freight and insurance costs, while delivery times have slowed.
The IMF highlighted fertiliser supply as a key concern, noting that a significant share of global shipments passes through the Gulf region. Any sustained disruption could reduce agricultural output and push food prices higher.
This poses a greater risk for low-income countries, where households spend a larger share of income on food, making them more vulnerable to price increases. The disruption is also affecting other critical inputs and trade flows, with knock-on effects on industries and economies linked to the region. The Fund warned that the conflict threatens recent progress made in reducing inflation globally.
