World on brink of global recession if oil price shock continues: IMF | The Business | ABC NEWS

The International Monetary Fund has cut its growth outlook due to the Middle East war triggering a global energy shock. The IMF warned the global economy would teeter on the brink of recession if the conflict worsens and oil prices stay above $100 per barrel through 2027. As the Strait of Hormuz remains closed and the US halts economic trade to Iran through its blockade, ships are being left stranded, supply chains are upended and oil and gas prices are climbing higher. In a "severe scenario", in which energy supply disruptions extend into next year and oil prices average $US110 a barrel this year and $US125 next, the IMF warns growth could slow to about 2 per cent in 2026 and 2027, while inflation "would exceed 6 per cent". Speaking before flying to the US to attend G20, IMF and World Bank meetings, Treasurer Jim Chalmers said the May budget would be responsible. The IMF and economists warn against big spending measures in the budget that would further spark inflation.
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