IMF forecasts 3% global growth in 2026, cites Iran war energy shock
10 reported
The International Monetary Fund on Wednesday downgraded its 2026 global growth forecast to 3%, down from 3.5% in 2025 and from its April forecast of 3.1%. The IMF cited the energy shock from the Iran war as the primary cause, noting that Iran shut down the Strait of Hormuz on Feb. 28 in response to U.S. and Israeli attacks. The closure disrupted a fifth of the world’s crude oil and natural gas supply, sending energy prices higher. The IMF now expects oil prices to rise nearly 32% this year and global consumer prices to increase 4.7% in 2026, up from 4.1% in 2025. The fund’s forecasts assume the Strait of Hormuz reopens later this month and commerce returns to normal by March 2027. Petya Koeva Brooks, deputy director of the IMF’s research department, said the world economy has weathered the shock better than feared, partly due to existing oil stockpiles and increased production from non-Persian Gulf oil exporters. The IMF expects the U.S. economy to grow 2.3% in 2026, while the euro area is forecast to grow just 0.9% and China 4.6%.
What’s reported
The IMF forecasts global economic growth of 3% in 2026, down from 3.5% in 2025 and from the 3.1% forecast in April.
The downgrade is attributed to the energy shock from the Iran war, specifically Iran shutting down the Strait of Hormuz on Feb. 28.
The Strait of Hormuz carries a fifth of the world’s crude oil and natural gas.
The IMF expects oil prices to rise nearly 32% in 2026 and global consumer prices to increase 4.7%, up from 4.1% in 2025.
The forecasts assume the Strait of Hormuz reopens later this month and commerce returns to normal by March 2027.
Petya Koeva Brooks, deputy director of the IMF’s research department, stated the world economy has weathered the shock better than feared.
The U.S. economy is forecast to grow 2.3% in 2026, up from 2.1% in 2025.
The euro area is forecast to grow 0.9% in 2026, down from 1.4% in 2025.
China is forecast to grow 4.6% in 2026, down from 5% in 2025.
India is forecast to grow 6.4% in 2026, down from 7.7% in 2025.
Key figures
Petya Koeva Brooks, deputy director of the IMF’s research department
President Donald Trump (mentioned as declaring a ceasefire with Iran was over)
Sources: abcnews.com
