IMF Chief Says Oil Shock Tests a World With Little Fiscal Buffer

The International Monetary Fund said that the conflict in the Middle East is a major supply shock that will test the resilience of a world with limited scope for fiscal support, even as US and Iran have negotiated a two-week ceasefire.

Given the uncertainties around the Middle East conflict, the Washington-based fund will publish a range of scenarios in its World Economic Outlook report next week. But even in the most hopeful case, the IMF is cutting its growth forecasts, managing director Kristalina Georgieva said.

“What we do know is that growth will be slower — even if the new ...