The International Monetary Fund (IMF) warned on Tuesday that the ongoing conflict in Iran is driving down global economic expectations and threatening investments in artificial intelligence.
In its April 2026 World Economic Outlook, the UN-backed financial institution highlighted significant setbacks compared to projections made before the outbreak of war in the Middle East.
The report identifies specific risks to private credit and a potential downturn in tech spending as the conflict persists.
Global financial risks
“The risks to global financial stability are elevated,” the IMF stated. “The global financial system faces the ongoing war in the Middle East, possible inflationary pressures, and the increased risk of further tightening of financial conditions.”
The organization noted that market volatility could easily transition into widespread financial instability through various amplification channels.
Regarding the technology sector, the IMF warned that AI investment could drop considerably if the war continues. This decline would impact the corporate value of companies within the AI value chain that rely heavily on circular financing.
While the fund noted that the current impact on financial stability appears moderate, it remains cautious about the sector's concentration risk. The IMF highlighted vulnerabilities in private credit and the growing market concentration in AI-related industries.
Beyond technology, the IMF flagged high debt levels and refinancing risks in major sovereign bond markets. It also pointed to rising leverage among non-bank financial intermediaries (NBFIs) and the use of derivative products.
Capital flows are becoming increasingly unequal and debt-heavy, according to the report. The IMF also warned that the strengthening link between banks and governments poses specific stability risks for emerging and developing economies.
