IMF warns ‘unprecedented’ energy crisis could trigger global recession as Australia prepares for Washington talks

Key points

• The International Monetary Fund has warned the US-Israel war on Iran risks creating an “energy crisis of an unprecedented scale” that could tip the global economy towards recession.
• The grim warning contained in the IMF’s latest World Economic Outlook comes as Jim Chalmers prepares to attend the organisation’s spring meetings in Washington DC this week, where he said he would be “joining with other countries continuing to call for an enduring end to the war”.
• As the United States began its blockade of the critical strait of Hormuz in an effort to force Iran back to the negotiating table, the IMF’s chief economist, Pierre-Olivier Gourinchas, said “the world economy faces another difficult test”.
• “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,” Gourinchas said.