Sri Lanka, April 14 -- The International Monetary Fund has modestly reduced its forecast for global economic growth this year, but warned that the damage from the war with Iran could be much more severe if the conflict dragged on and oil prices rose further.

"Once again, the global economy is being threatened with being thrown off course - this time by the outbreak of war in the Middle East," the IMF said in its latest World Economic Outlook report, published today.

The fund now expects global growth of 3.1% in 2026, a 0.2 percentage point downgrade from its January forecast. This modest revision assumes that the war will be "relatively short-lived," it said.

However, it also outlined two scenarios for a longer-lasting conflict. Under ...