Iran war causing 'very significant' growth downgrade

IMF Chief Economist Pierre-Olivier Gourinchas said the Iran war poses a meaningful downside risk to the global economy, with central banks likely needing to stay alert to second-round inflation effects. The key transmission channels are higher energy prices and broader geopolitical uncertainty, which could slow growth while keeping inflation stickier. The comments are market-relevant because they speak to global macro risks, policy response, and potential pressure on rates and risk assets.

Analysis

IMF Chief Economist Pierre-Olivier Gourinchas said the Iran war poses a meaningful downside risk to the global economy, with central banks likely needing to stay alert to second-round inflation effects. The key transmission channels are higher energy prices and broader geopolitical uncertainty, which could slow growth while keeping inflation stickier. The comments are market-relevant because they speak to global macro risks, policy response, and potential pressure on rates and risk assets.