Hormuz Strait closure takes its toll on global economic growth
Summary
The IMF warns that the Middle East conflict and the closure of the Hormuz Strait have led to lower global economic growth forecasts, with developing countries like Nepal expected to suffer the most significant impact.
Key Points
- The IMF has revised its global growth forecast for 2026 down to 3.1 percent due to the Middle East conflict.
- Developing countries are expected to face twice the economic impact compared to developed nations.
- Nepal’s growth forecast for FY 2025-26 is slashed to 2.9 percent, much lower than the government’s 6 percent target.
- The IMF urges governments and central banks to stabilize prices, maintain fiscal discipline, and invest in renewable energy to mitigate future shocks.
