IMF, others lower GDP growth forecasts

The war in Iran will have a noticeable impact on the global economy, according to recent estimates that a risk-aware CFO will find unsurprising.

In its latest World Economic Outlook released on Tuesday, the International Monetary Fund predicted global real GDP growth would slow to 3.1% this year, compared with 3.4% growth in 2024 and 2025. That’s 0.2 percentage points lower than the IMF’s previous estimate. The organization didn’t change its 2027 growth estimate of 3.2%.

“Absent the war [in the Middle East], global growth would have been revised upward,” the IMF noted. The conflict “presents a significant counterforce” to tailwinds like tech investments and a weaker US dollar, through its impact on commodity prices and inflation expectations, it added. Also noteworthy: The IMF made its predictions with the assumption “the conflict remains limited in duration and scope.”

Oxford Economics was even more pessimistic. In a research briefing released the same day, the organization called the IMF’s forecast “still too rosy.” Rather, it expects 2.9% global GDP growth in 2026. The economic forecasting and advisory firm noted that its more pessimistic view is “consistent with a higher oil price path than the IMF’s: we anticipate the Brent oil price averaging $90pb in 2026—about $10pb higher than the IMF assumes.”

Oxford Economics also cut its March estimate of US GDP growth by 0.9 percentage points to 1.9%. The lowered projection reflects “the weak start to the year due to poor weather and the expected hit to consumer spending from higher oil prices.” But Oxford Economics noted that it expects disruption from the war in Iran will “prove short-lived.”

The IMF projects real GDP growth for the US would be slightly higher for 2026: 2.3%.

What finance execs are thinking. CFOs are aware that geopolitical instability can impact their organizations’ bottom line.

McKinsey’s latest CFO Pulse survey found that finance leaders viewed geopolitical issues as “one of the biggest risks to their company’s growth,” even more than they did in an early 2025 survey.

Similarly, Deloitte’s Q1 2026 North American CFO Signals survey found that finance leaders have less risk appetite than before. Just under half of respondents (48%) agreed it was a “good time to take greater risks,” compared with 59% in Q4 2025. CFOs named supply chain disruption as the biggest external risk, followed by inflation, geopolitics, and interest rates.

Geopolitical volatility makes it harder for organizations to predict and plan, according to Aidana Zhakupbekova, CFO of expense-management software firm Rydoo. Zhakupbekova told CFO Brew that traditional budgeting is “no longer acceptable” and quarterly forecast updates become stale too quickly due to cost volatility.

“I personally can’t wait, even for a month to close, to see where we’re at,” she said. “We need to understand how we’re hit—if it’s a little bit over budget here and there, it might be fine, but if you see consistent overspend in the cost category…you need to pivot sooner.”