IMF Lowers Global Growth Forecast Amid Middle East Conflict; France Faces Moderate Economic Impact

The International Monetary Fund (IMF) has revised down its global economic growth projections due to the ongoing Middle East conflict sparked by Israeli-American bombings in Iran on February 28. Globally, growth is now expected to reach 3.1% in 2026, a decrease from the previously forecasted 3.3%. In a scenario where the conflict persists, growth could slip further to 2%, marking a rare and significant slowdown.

Increased oil prices linked to the conflict have led the IMF to raise its inflation forecast to 4.4% worldwide, up 0.6 percentage points since January. The economic aftershocks are uneven across regions. The Middle East, North Africa, and Central Asia bear the brunt, with growth in these areas cut roughly in half. Saudi Arabia’s growth forecast was downgraded by 1.4 points to 3.1%, reflecting this strain.

Conversely, major emerging economies are showing robust resilience. China’s growth forecast was marginally cut by 0.1 points to 4.4%, while India’s forecast was slightly increased to 6.5%. Russia is projected to benefit from higher oil prices, with an upgraded growth forecast of 1.1%. Among advanced economies, the United States is expected to be minimally affected, with growth revised only slightly downward to 2.3% for 2026, whereas the United Kingdom faces a deeper slowdown, dropping to 0.8% growth.

France’s economy, while impacted, fares better than some of its European neighbors such as Germany and Italy. Its growth forecast was reduced marginally by 0.1 points to 0.9%. However, concerns linger about rising public debt prompted by government measures to shield households and businesses from the conflict’s economic consequences.

IMF Chief Economist Pierre-Olivier Gourinchas highlighted that despite this being the most severe energy shock since the 1970s oil crisis, its global economic toll is less pronounced due to the economy’s reduced oil dependency and diversified energy sources today. The French economy's relatively moderate impact stems from this evolving global energy landscape and its comparative economic structure.