IMF expects world economy to grow a sluggish 3% this year, weighed down by Iran war but helped by AI
The fund said war-related energy shocks and trade risks are slowing growth, while AI-driven tech demand is helping offset some losses.
- 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.
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IMF cuts global growth forecast to 3.0%
The report warned that the possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions. The post IMF cuts global growth forecast to 3.0% appeared first on Premium Times Nigeria.
The International Monetary Fund (IMF) cut back on Wednesday, July 8, again its forecast growth for the world economy in 2026, since the rise of artificial intelligence failed to fully compensate for the repercussions of the war in the Middle East.The agency estimates that global economic growth will be 3% this year, compared with 3.1% predicted in April.Latin America will remain stable, with growth around 2.4% in 2026, to rise to 2.7% next year,…
The International Monetary Fund (IMF) maintained its estimates of global economic growth at 3.0 percent and 3.4 percent by 2026 and 2027, below 3.5 percent in the period 2024 to 2025 and its expectation of global inflation is that of an increase to 4.7 percent in 2026 from 4.1 percent in 2025, to decrease to 3.9 percent in 2027.“The risks in the picture are more balanced than in April, but continue to decline.
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