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President Bassirou Diomaye Faye dismissed Prime Minister Ousmane Sonko and dissolved the government, with ministers left to run day-to-day affairs. The move, amid mounting debt pressures and strained IMF negotiations, risks delaying a new bailout as talks were expected to resume in June.
The European Commission said part of a 90-billion-euro loan to Ukraine will be conditioned on improving revenue collection, spending efficiency, and reform measures such as taxing digital-platform income, setting sectoral public-investment plans, and updating the customs code. If Kyiv meets the criteria, an initial tranche of about 3.2 billion euros could be disbursed in June as part of roughly 8.35 billion in micro-financial aid, amid IMF-aligned reform pressure and a slow reform pace blamed on wartime constraints and political resistance.
The IMF lifted its 2026 UK growth forecast to about 1% and said the Bank of England should remain ready to cut rates if needed, even as holding at 3.75% may be appropriate to limit second-round inflation effects. With energy prices pushing inflation higher in the near term and then easing, the IMF expects inflation to return to target by end-2027 as growth gradually recovers, arguing for data-driven, meeting-by-meeting policy decisions.
Japan reportedly intervened in the yen during Golden Week after it slipped past 160 per dollar, with a second suspected move in early May; the yen jumped briefly but subsequently weakened again. Analysts say such interventions offer only temporary relief against a sustained pull from a wide interest-rate gap with the U.S. and rising import costs, and IMF notes that Japan can only use a few more interventions before affecting its free-floating status; the BOJ faces a policy dilemma between raising rates to defend the yen and supporting growth.
Japan received its first shipment of Russian oil since the Hormuz strait closure amid escalating US-Iran tensions. The US-led effort to reopen the strait (Project Freedom) continued as Iran warned of escalation and attacks on the UAE persisted. Global markets fell on renewed risk, with the IMF warning that a protracted conflict could worsen inflation and push oil prices toward $125 a barrel, potentially yielding a much worse outcome if the war drags into 2027.
European finance officials pressed Washington during the IMF-World Bank spring meetings to advance growth, energy security, Ukraine support, and a more integrated EU financial market, but the U.S. response centered on growth and a China-focused strategic rivalry, making Europe feel sidelined and prompting concerns about cross-Atlantic cooperation amid financial and geopolitical tensions.
Qatar’s finance minister warned at the IMF Spring Meetings that the Strait of Hormuz disruption could trigger a broader energy and commodities shock in coming months, potentially causing shortages in fertilisers, helium, healthcare and semiconductors. The Ras Laffan LNG facility damage underscores longer-term disruption for global LNG markets, but Qatar says it has buffers and targeted support to weather the immediate impact.
At the IMF and World Bank spring meetings in Washington, officials warned that the Iran war could trigger a global recession and energy-price surges, casting a somber mood as policymakers discuss cooperation and strategies to cushion the world economy while geopolitical tensions complicate consensus.
IMF chief Kristalina Georgieva warns the world economy is being tested by a large energy-price shock from Middle East tensions, saying everyone will feel the pain and urging governments not to cushion demand with subsidies. Amid the turmoil, UK February GDP rose 0.5%—suggesting momentum before the conflict weighed on prospects—while Europe faces warnings of jet-fuel shortages as energy costs surge. The disruption shows up across markets and firms, from airline cutbacks to Nigeria’s Dangote refinery boosting jet-fuel exports, highlighting the global spillovers of the energy squeeze.
The IMF warns that escalating Iran-related conflict could push global debt toward 100% of GDP by 2029 as energy and food prices rise, raising borrowing costs and slowing growth. It urges targeted, temporary support for those most affected and avoiding new borrowing to protect fiscal space, warning that missteps could destabilize debt markets and spark a global recession, with the UK highlighted for market sensitivity to fiscal slippage.
The IMF cautions that war-driven energy price spikes strain public finances and urges governments to drop broad fuel subsidies in favor of targeted, temporary cash transfers to preserve price signals and curb inflation, warning debt levels are rising and could reach about 100% of GDP by 2029; policymakers should still plan medium-term consolidation once the crisis subsides.
The IMF says the world will face a global oil shortfall this year even if the Iran war ends soon, noting the March disruption was the largest in history. The IMF’s World Economic Outlook trims 2026 global growth to 3.1% with inflation around 4.4%, but a longer war or oil-price spikes could push growth to about 2% and raise recession risk. Iran’s actions have effectively blocked Hormuz, affecting roughly one-fifth of world crude supply, which could drive up fuel costs and inflation, prompting warnings of an energy crisis and calls from leaders for an end to the conflict.
The IMF says the Iran war has halted global economic momentum, trimming its 2026 global growth forecast to 3.1% and lifting inflation to about 4.4% this year, with downside scenarios showing growth near 2% and inflation around 6% if energy disruptions worsen; the report also notes uneven strength in the US and the risk that energy-market disruptions could spur stagflation.
The IMF warns that a protracted war in the Middle East could slow global growth to as little as 2% this year and push inflation above 6% next year, driven by higher energy and food prices and rising interest rates; the impact would hit emerging markets hardest, while the U.S. could stay relatively insulated, with energy-importing regions like Europe and Sub-Saharan Africa facing higher balance‑of‑payments risks and hundreds of millions potentially facing hunger.
IMF chief Kristalina Georgieva warns that the Iran conflict and related tensions are weighing on the world economy, prompting a downgraded growth outlook and greater uncertainty for both advanced and emerging markets.