The International Monetary Fund warned Tuesday that the US-Israeli war on Iran could slow global economic growth, stoke inflation, and increase the possibility of a worldwide recession and energy crisis.

The illegal war of choice on Iran being waged by US President Donald Trump and the government of fugitive Israeli Prime Minister Benjamin Netanyahu has already had wide-ranging negative impacts on the global economy, from soaring fuel prices caused by the closure of the Strait of Hormuz to supply chain disruptions and financial market volatility.

However, a major global economic crisis has thus far been averted. That could soon change.

“Despite major trade disruptions and policy uncertainty, last year ended on an upbeat note,” International Monetary Fund director of research Pierre-Olivier Gourinchas wrote in an analysis of the IMF’s latest World Economic Outlook report. “The private sector adapted to a changing business environment, while powerful offsets came from lower US tariffs than originally announced, some fiscal support, and favorable financial conditions coupled with strong productivity gains and a tech boom.”

“Despite some downside risks, the momentum was expected to carry over into 2026, lifting the pre-conflict global growth forecast to 3.4%,” Gourinchas continued. “War in the Middle East has halted this momentum. The closing of the Strait of Hormuz and serious damage to critical facilities in a region central to global hydrocarbon supply raise the prospect of a major energy crisis should hostilities continue.”

The IMF said that even if the war ends quickly, lasting damage to the world’s economy will still happen.

According to the IMF report:

Under the assumption of a limited conflict, global growth is projected at 3.1% in 2026 and 3.2% in 2027, below recent outcomes and well under pre-pandemic averages. Global inflation is expected to tick up in 2026 and resume its decline in 2027. Pressures are concentrated in emerging market and developing economies, especially commodity importers with preexisting vulnerabilities. Risks are decisively on the downside. A prolonged conflict, deeper geopolitical fragmentation, disappointment over [artificial intelligence]-driven productivity, or renewed trade tensions could weaken growth and unsettle markets. High public debt and eroded policy buffers add vulnerability. Policies should foster adaptability, enhance credibility, and reinforce international cooperation.

The IMF said that “the shock’s ultimate magnitude will depend on the conflict’s duration and scale—and how quickly energy production and shipment normalize once hostilities end,” and that effects will vary by location.

“Countries will feel the impact differently,” Gourinchas wrote. “As in past commodity-price surges, importers are highly exposed. Low-income and developing economies—especially those with vulnerabilities and limited buffers—are likely to be hit hardest. Gulf energy exporters will face economic fallout from damaged infrastructure, production disruptions, export constraints, and weaker tourism and business activity. Remittances will fall in countries that supply migrant workers to the region.”

Eric LeCompte, executive director of the religious development group Jubilee USA Network and a United Nations finance expert, called the new IMF forecast “extremely concerning for the global economy,” lamenting that “the most dire impacts of our economic situation will be felt by the poor and the vulnerable.”

The new report comes as the IMF’s annual Spring Meetings are underway in Washington, DC.

“World leaders coming to Washington are receiving a very dark picture of the global economy,” said LeCompte. “The war is causing greater poverty and increases in our fuel and food costs.”

Other groups have also warned of the adverse economic effects of the US-Israeli war on Iran.

Ben May, Bridget Payne, and Paul Moroz of Oxford Economics recently published a report warning that a longer war in Iran “could tip the global economy into recession.”

In such a situation, “the Gulf states suffer most acutely—GDP down over 8% in 2026—before rebounding sharply as production recovers,” they wrote. “Advanced Asian economies, which are especially reliant on Gulf oil, take a heavy blow from energy import cost surges and supply chain disruption.”

“Europe faces a painful squeeze on gas and electricity,” the trio added. “The US fares somewhat better given its domestic energy production, but an equity market decline of nearly 20% weighs heavily on consumer spending.”

Some US-based organizations have focused on the war’s domestic economic impacts.

Dean Baker, a senior fellow at the Center for Economic Policy Research, published an analysis earlier this month asserting that “making enemies makes us poorer.”

“Secretary of Defense (or War) Pete Hegseth seems to be having a really great time killing people in Iran, but his live action video games come at a big cost—not just in lives, but in budget dollars,” Baker wrote. “To be clear, the main reason to oppose this pointless war is its impact on the people of Iran and elsewhere in the region. But it also has a huge economic cost that is seriously underappreciated.”

“In addition to reducing our security and jeopardizing the well-being of people around the world, Donald Trump’s belligerence will cost us a huge amount of money,” he said. Focusing on US military spending, Baker noted that “Trump wants the country to spend 5% of GDP, or $1.5 trillion a year, on the military. This comes to $12,000 per household.”

Trump and his Republican Party are seeking to offset some of their record military spending with devastating cuts to social programs upon which tens of millions of Americans rely. Already reeling from the biggest cuts to Medicaid and Supplemental Nutrition Assistance Program spending in those programs’ histories, Trump’s budget request for fiscal year 2027 contains $73 billion in total reductions in nondefense spending.

“It is striking to see that Congress might be willing to quickly cough up this money,” said Baker, referring to military funding, “when it has refused far smaller sums that could have made a huge difference in the lives of tens of millions of people.”

Lindell TV host Cara Castronuova pressed for President Donald Trump to name former New York Mayor Rudy Giuliani as his next attorney general.

During a Tuesday interview with Giuliani, Castronuova reviewed the requirements for a MAGA attorney general.

"There's a lot of things, a lot of Trump supporters and people that voted for the president are looking for," she noted. "A lot of things that we voted for when we voted for President Trump in 2024. One would be somebody that would go after fighting weaponization, that would go after issues like the 2020 election, like J6 prosecutions, like rogue judges, and so many other things."

"I have so much respect for the president," Giuliani gushed. "He's more than just a president. He's somebody that I consider a very, very close personal friend. I worry about him constantly. I pray for him all the time for reasons that you know, because he's a man in danger. And probably no one that knows it better than I do."

"Nobody's investigating the attempted assassination of the president the way I would have when I put the mafia in jail or when I did 100 murders," he continued. "Well, I think I could straighten out the Justice Department. You don't have to make me attorney general. Just put me there for three months. And before I'm finished, there'll be a new Justice Department. And the left-wing press will want to get me disbarred, but you'll find out that I am."

Castronuova pointed out that the attorney general did not need to be a lawyer.

"As you know right now, MAGA is sort of at war, but both sides can agree that somebody like you or somebody that would really fight weaponization would be a really ideal pick," the Lindell TV host said. "Like if someone easily passed Senate confirmation, that probably means they're not the right person right now to clean up anything."

Giuliani complained that the current Justice Department wouldn't show him probable cause after an earlier administration served a search warrant on his apartment.

"A lot of people are lawyers that shouldn't be," he remarked. "I'm someone that should be a lawyer, and I was thrown out for reasons that are un-American, and reasons that really have to do with the fact that we went through five years of the dark ages."

Castronuova insisted that Giuliani "would be perfect" as attorney general.

"Like in the bad times, I got to witness your courage and your strength," she recalled. "We didn't know President Trump was going to get reelected. We didn't know we were going to make a comeback the way that we did. And you never bent. Like your backbone stayed intact."

"So that's why I'm advocating for you," she added. "I hope you don't mind that I'm doing that."

"I don't mind," Giuliani replied. "I have no doubt that I could reform the Justice Department."

"I know it better than anyone else. I've probably been in it longer than anyone else. In a lot of different positions, including a law clerk to a federal judge, so I know the judiciary," he said. "But politically, it's a very difficult choice. And also within his administration, you know, there are people that don't want people around who are associated with his past because they think that's bad for him politically."