IMF Warns of Stagflation, Global Growth Slash

0:00The IMF just dropped the heavy world economic outlook report, warning that Middle East conflict is jacking up energy prices and slashing global growth. Forecasts, they laid out three scenarios based on how long supply state disrupted, like if the straight of hormones stays shut. In the mild case, with energy prices of just 19% this year, expect global GDP growth at 3.1% and inflation at 4.4%. But things get rougher. Adverse hits growth to 2.5% in 2026, with 5.4% inflation and the severe one. Drags it to 2% through 2027, while inflation tops 6%. Down under in Australia, this is hitting hard pre-war forecasts at 2.1% growth in 2026, but now reserve bank deputy. Governor Andrew Halzer calls it a big income shock, with consumer and business confidence tanking. Dubbed at Central Banker's Nightmare Stack Flation, where prices rise, but activity dips.

1:00IMF Chief Economist Pierre Olivier Garinches says Central Bank's got a hike rates to crush inflation first, even if growth suffers, and skip broad. Fuel subsidies, better to target aid to the vulnerable. Meanwhile, Australia's treasurer Jim Chalmers hits to G20 meetings in Washington to talk it out with key players like China and Japan. Central markets have held steady so far without major crashes, but the IMF's stability report flags rising debt and leverage risks if the war drags. On potentially sparking four sell-offs and tighter conditions worldwide, stay informed with Sydney News today, AI-powered updates.