CANBERRA - Australian Treasurer Jim Chalmers said on Wednesday that the global economy is in a dangerous time after the International Monetary Fund (IMF) cut growth forecasts due to the conflict in the Middle East.

Chalmers told Australian Broadcasting Corporation (ABC) radio that the IMF was "sounding the alarm" about the potential economic impacts of the conflict in its World Economic Outlook (WEO) report released on Tuesday.

In the report, the IMF lowered its global economic growth forecasts for 2026 to 3.1 percent and warned that growth could slow to 2.0 percent in a severe scenario where energy supply disruptions persist into 2027.

"This is a really dangerous time for the global economy. The International Monetary Fund is expecting slower growth and higher inflation, and we are too," said Chalmers, who will on Wednesday travel to the United States to attend IMF meetings in Washington.

"From an economic point of view, the end of this war can't come soon enough. Australians didn't choose the circumstances of that war, but they are paying a very hefty price for it."

The IMF said that Australia's economy is now expected to grow by 2.0 percent in 2026, down from the 2.1 percent it projected in January, and 1.7 percent in 2027, down from 2.2 percent.

It projected that inflation in Australia would rise from 2.9 percent in 2025 to 4.0 percent in 2026 and warned that any government support measures to address the cost of living could add to inflation.