## Global Economy Endures War Shock—So Far

_IMF Blog, June 15, 2026_

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## Bibliographic details
- Authors: Kristalina Georgieva
- Published: June 15, 2026

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### Current global assessment and timing
- Publication: June 15, 2026.
- More than three months into the war in the Middle East, the global economy appears to be holding up.
- IMF will provide an updated analysis on July 8, in the next World Economic Outlook Update.
- The IMF is on high alert and stresses that the current reassurance is "not complacency."

### Drivers of global resilience so far
- Oil prices are 30 percent higher than pre-war levels.
- Oil prices rose significantly at the conflict’s outset but are lower than earlier peaks despite the straits’ prolonged closure.
- Contributing factors to resilience:
  - Some countries (example: China) have tapped deep oil reserves to cushion disruption.
  - Increased production and refinery utilization outside the Gulf have contained price increases, though not fully offsetting the shock.
  - Actions to dampen demand or limit price passthrough have mitigated impacts, but these measures have limits due to higher budgetary costs and external financing requirements.
  - Headline inflation has picked up in many economies, but medium-term inflation expectations "generally remain well anchored."
  - Government bond yields have climbed significantly since the war began, yet risk assets have rallied on strong earnings and financial conditions remain accommodative by historical standards.
  - Strong technology-related investment—particularly in artificial intelligence and data centers—supports momentum in countries where it is concentrated (notably the United States and some Asian economies).

### Distribution of impacts — hardest hit
- Geography, energy dependence, and limited policy space determine vulnerability.
- Gulf oil exporters directly affected by the war face steep downward revisions to growth this year, with five out of eight countries seeing outright contractions.
- Europe: heavily dependent on imported oil and gas; higher energy prices are weighing on growth and putting upward pressure on inflation; the ECB has recently raised interest rates.
- Emerging market economies in Asia:
  - Face relatively higher oil and gas intensity.
  - Retail gasoline prices have increased 40 percent since the war began.
  - Rising government bond yields, currency depreciation, and capital outflow pressures have amplified costs.
- Africa:
  - Many countries combine heavy reliance on energy imports with limited policy space; strain is especially visible.
  - Several countries have been managing fuel shortages, including Ethiopia, Malawi, and Zambia.
  - In Lesotho, Rwanda, and Tanzania, gasoline prices have increased by about half since the onset of the war.
  - Higher energy prices have driven up fertilizer and food costs, increasing the risk of food insecurity; persistent disruptions could cause farmers in many low-income countries to struggle and may further fuel inflation for months to come.

### Risks and uncertainty
- The duration and intensity of the energy supply shock are critical determinants of future outcomes.
- Infrastructure damage in the Middle East means supply will take time to recover.
- Sunday’s ceasefire announcement is welcome, but should the conflict or disruptions intensify, there is clear risk to global growth.

### Policy guidance: discipline and agility
- Central banks: maintaining price stability is essential; some central banks have begun to tighten to keep inflation expectations anchored.
- Fiscal policy:
  - Fiscal discipline is important as borrowing costs rise.
  - Price caps, subsidies, and similar interventions are costly; fiscal responses should be targeted, temporary, preserve price signals, and well-sequenced to protect the vulnerable without undermining public finances.
  - Fiscal space is also needed to ensure AI-driven growth translates into shared prosperity, including addressing new vulnerabilities and investing in technology and people to prevent emerging and developing economies from being left behind.

### IMF support and actions
- Most member countries currently seek clear, candid policy guidance rather than financial support; IMF is providing tailored policy advice and capacity development.
- For countries needing financial support, the IMF is stepping up and working with several countries, with forthcoming Executive Board proposals to adjust existing programs in response to the shock.
- Country-specific IMF actions mentioned:
  - The Gambia: requested an augmentation and program extension.
  - Burkina Faso: reached staff-level agreement on a funding increase to address higher external financing needs.
  - Ethiopia: IMF aims to bring forward financing to this year.
  - Malawi: discussions initiated on a new program.
  - Bangladesh: has requested a new program.
- The IMF emphasizes tailored support reflecting differentiated member needs, aiming to help manage the shock and limit negative impacts, especially on the vulnerable.

*Source: Kristalina Georgieva, "Global Economy Endures War Shock—So Far", June 15, 2026.*

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## References

- [Asia](https://www.imf.org/en/blogs/articles/2026/04/16/asias-economic-resilience-is-being-tested-by-the-energy-shock)
- [Fiscal responses](https://www.imf.org/en/blogs/articles/2026/05/20/responding-to-the-energy-and-food-price-shock-getting-the-policy-details-right)

_Source: https://www.imf.org/en/blogs/articles/2026/06/15/global-economy-endures-war-shock-so-far_