IMF expects world economy to grow a sluggish 3% this year, weighed down by Iran war but helped by AI
- The International Monetary Fund downgraded its global economic outlook on Wednesday, citing ongoing risks from the Middle East war, trade fragmentation, and potential AI market corrections.
- Iran's February 28 closure of the Strait of Hormuz—through which a fifth of global crude oil passes—triggered energy price surges that continue squeezing businesses and consumers worldwide.
- The IMF expects global consumer prices to increase 4.7% in 2026 as oil prices rise nearly 32% this year, meaning two years of inflation progress has stalled.
- Deniz Igan, chief of the IMF Research Department's World Economic Studies division, said the global economy is proving more resilient than expected despite the war, with tech sector demand offsetting energy supply losses.
- Global growth is projected to rebound to 3.4% in 2027, though this remains below the 3.5% average seen in 2024 and 2025, as the Strait of Hormuz is expected to reach prewar conditions by March 2027.
123 Articles
123 Articles
IMF lowers 2026 global growth forecast to 3%
The International Monetary Fund has inched its 2026 global growth forecast lower again to a sluggish 3%, warning of ongoing risks linked to the war in the Middle East, trade fragmentation and potential corrections in market expectations for AI.
The International Monetary Fund (IMF) has lowered its forecast for global economic growth this year. The analysis suggests that while increased investment in artificial intelligence (AI) is supporting growth, uncertainty surrounding the global economic growth outlook is growing due to ongoing trade conflicts and geopolitical instability. According to Reuters on the 8th (local time), the IMF lowered its forecast for global economic growth this ye…
IMF slashes growth outlook on Iran conflict
The global economy will grow at a slower rate in 2026, the IMF said Wednesday, as high energy prices resulting from the Iran conflict drag on growth and drive inflation. The fund lowered its global forecast to 3%, down from April and below the last two years’ averages, but noted that the global economy avoided a sharper downturn, in part due to increased demand for AI, and projected growth would rebound in 2027. The US Federal Reserve’s June mee…
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