IMF Cuts 2026 Global Growth Forecast to 3.1% on Middle East War

The International Monetary Fund lowered its global economic growth forecast for 2026 to 3.1 percent on April 14, citing disruptions from the ongoing war in the Middle East as the primary factor in a 0.2 percentage point downgrade from its January projection. The update, part of the fund's World Economic Outlook released ahead of the Spring 2026 Meetings in Washington, D.C., reflects a sharp reversal from what would have been a slight upward revision to 3.4 percent without the conflict. This comes after estimated global expansion of 3.4 percent in 2025.

IMF Chief Economist Pierre-Olivier Gourinchas attributed the slowdown to the war's impact on energy markets, including the closure of key shipping routes like the Strait of Hormuz, which has driven a moderate 19 percent rise in energy prices under the fund's reference scenario. "The war has halted what had been a steady upward trajectory," Gourinchas said during a press conference, noting that global headline inflation is now projected to climb to 4.4 percent in 2026 before easing to 3.7 percent in 2027.

The report outlines three scenarios to account for uncertainty. In the reference case, assuming a short-lived conflict, growth...