IMF warns Iran crisis could stifle Sub-Saharan GDP growth, slashes forecast

The IMF has reduced its growth forecast for the region by 0.3 percentage points, from an initial 4.6 percent for 2026. Countries reliant on fuel imports are particularly vulnerable, while oil exporters may find any benefits offset by market volatility. The report highlights that Sub-Saharan Africa had a strong 2025, with regional growth estimated at 4.5 percent, the fastest in a decade, due to favorable external factors and sound policies.

However, the Middle East conflict has led to sharp increases in oil, gas, and fertilizer prices, as well as shipping costs. This situation has also disrupted trade with Gulf partners, reduced tourist arrivals, and is expected to decrease remittances to some countries. The IMF projects median inflation to reach five percent by the end of 2026, nearly double the 3.4 percent recorded in late 2025.

A 20 percent rise in international food prices could push over 20 million people into moderate or severe food insecurity across the region. The IMF advises African governments to implement policies that address immediate shocks and build long-term resilience, including protecting vulnerable populations, managing fiscal strategies, and mobilizing domestic revenues. Ethiopia, Ghana, and Zambia have made progress in sovereign debt restructuring, with Ethiopia and