IMF cuts 2026 global growth to 3% as Iran war offsets AI boom
The International Monetary Fund cut its 2026 global growth forecast to 3% , down from 3.5% last year and below the 3.1% it projected in April, blaming the energy shock from the Iran war even as heavy investment in artificial intelligence and other technologies offsets part of the drag.
The inflation picture is the sharper concern. The Fund now expects oil prices up nearly 32% for the year and global consumer prices to rise 4.7% in 2026, versus 4.1% in 2025 — effectively stalling two years of disinflation. Higher energy costs feed through the whole economy, which is why a regional war translates into a worldwide price problem.
The projections rest on a fragile assumption: that the Strait of Hormuz, which Iran closed on Feb. 28 and through which about a fifth of the world’s oil and gas moves, reopens later this month and returns to normal traffic by next March. That base case looked shakier the same day the forecast landed, as US strikes on Iran resumed and Trump declared the ceasefire over — meaning the IMF’s numbers could prove optimistic if the strait stays contested.