Every April, the world's finance ministers and central bankers gather in Washington for the Spring Meetings of the International Monetary Fund and the World Bank. They come to read the forecasts, compare notes and, usually, to talk about growth. In 2026, they came to talk about war. On 28 February, US and Israeli strikes on Iran opened a conflict that effectively closed the Strait of Hormuz, the narrow channel that carries around a fifth of the world's oil and liquefied natural gas. By the time the meetings opened on 13 April, the shock had travelled through tanker routes, energy prices, fertiliser markets and inflation expectations into almost every economy on earth.
THE FORECAST The IMF's April World Economic Outlook carried its own headline: Global Economy in the Shadow of War. Its reference forecast put global growth at 3.1% in 2026 and 3.2% in 2027, a downgrade from January. That forecast rested on an assumption the Fund was careful to spell out: a conflict of limited duration, intensity and scope, with disruption fading by the middle of the year, and energy prices around 19% higher in 2026. The Fund also set out what happens without that assumption. In an adverse scenario, with energy prices staying higher for longer, global growth slows to 2.5% this year. In a severe scenario, with deeper damage to energy infrastructure in the region, it falls to about 2% in both 2026 and 2027. The IMF compared the oil shortfall, even if the fighting had stopped in April, to the 1974 oil shock on an annual average basis.
ENERGY, BACK AT THE CENTRE An oil shock comes in through every door. Transport costs more, factories pay more, households have less, and food prices follow. Importing countries watch their currencies weaken. The IMF's reference forecast has global headline inflation at 4.4% in 2026, easing to 3.7% in 2027. In the adverse case it rises to 5.4%. In the severe case, the Fund's illustrative figures reach 5.8% this year and around 6% next. Exporters collect more for their oil and live with the war on their doorstep. Importers pay. The poorest countries, where food and fuel eat most of a family's budget and governments have little to cushion the blow, are hit hardest.
HORMUZ The real decisions of the week were not being taken in Washington. On 17 April, Iran announced that it would reopen the strait. Mohammed Al-Jadaan, Saudi Arabia's finance minister and chair of the IMF's steering committee, welcomed the news and warned against reading too much into it. "The hope is that we will see a serious, serious, credible de-escalation," he said. "But until that, I don't think insurance companies would respond." His point was practical. Oil can be produced again. Tankers will only move when insurers are willing to cover them. And, he added, "it will take a bit of time for producing countries to ramp up in response." The ceasefire in place that week was due to expire within days.
CHINA AND THE EMERGING WORLD The Fund's numbers for China: growth of 5% in 2025, 4.4% this year, 4% in 2027. The second-largest economy is slowing, and the energy shock landed on top of it. Emerging markets have absorbed shock after shock in recent years. The IMF's warning was blunt. Debts are high and budgets are thin, so whatever help governments offer now has to be aimed precisely.
THE AI QUESTION Before the war, technology spending was one of the main things holding the world economy up. Artificial intelligence pulled in money for chips, data centres and software. The IMF listed a reassessment of AI among the biggest risks to its forecast: investors deciding the profits will be smaller, or the margins thinner, even if the productivity gains arrive. That, the Fund warned, could cut investment and trigger an abrupt fall in financial markets. The hopeful version is real. Faster productivity could lift growth for years and help ageing countries carry their populations. The cautious version is that the costs come now and the gains come later, unevenly, and perhaps smaller.
TRADE, DEBT AND DEFENCE Tariffs, subsidies and export controls were already reshaping trade before the first missile flew. Companies have been moving suppliers and factories to hedge against politics. Every duplicated supply chain buys safety and costs money. Public debt narrows the room further. Governments want to protect households and industries, while high borrowing costs and heavy existing debts limit what they can do, and bond markets are watching. Defence was the new line in the ledger. Higher military budgets can lift activity in the short term, the IMF said, while adding to inflation, straining public finances and squeezing social spending.
THE BORROWERS' PLATFORM The most concrete step of the week came from the countries that owe the money. On 15 April, on the margins of the meetings, developing countries launched the Borrowers' Platform, a forum run by and for debtor nations, with Egypt as chair, Pakistan as vice-chair and UNCTAD as secretariat. Thirty countries attended, sixteen of them represented by finance ministers or central bank governors. António Guterres, the UN Secretary-General, called it a breakthrough. Barbados's prime minister, Mia Mottley, spoke at the opening. The numbers behind it are stark. Developing countries spend close to 10% of government revenue on interest to foreign creditors, and the poorest nearly a quarter. Fifty-four countries, home to 3.4 billion people, spend more on debt than on health or education. Since 2020, many have borrowed at two to four times the rate the United States pays. The platform will not restructure anyone's debt. It is there to share experience, build expertise and give borrowers one voice in a system long built around creditors.
A NARROWER MARGIN Central banks face an unforgiving choice. Raise rates too far and the slowdown deepens. Wait too long and inflation settles in. Finance ministers have to shield the most vulnerable without spending the room they will need for the next shock. The IMF's advice: stay flexible, stay credible, and target help at those who need it most. The April forecast did not describe a world economy in collapse. It described one still growing, on resilience that had grown thinner and now depended on a ceasefire, an insurance market and the returns on a technology boom. The same shock lands very differently on an oil exporter, an industrial importer and a poor country already spending more on interest than on schools. The world economy kept moving in April 2026. The margin for error had simply grown narrower.