Donald Trump · Iran · Israel · Fortune Technology
IMF slashes global growth forecast, blaming 'war in the Middle East' for paused momentum
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The Iran war has stalled the world’s economic momentum this year, likely pushing growth lower compared to 2025, the International Monetary Fund warned Tuesday.
Key facts
- The IMF downgraded its forecast for global growth to 3.1% in 2026 from the 3.3% it had forecast back in January
- As a result, the IMF marked up its expectation for global inflation this year to 4.4% from 4.1% in 2025 and from the 3.8% it had forecast for this year in January
- The Iran war has stalled the world’s economic momentum this year, likely pushing growth lower compared to 2025, the International Monetary Fund warned Tuesday
- War in the Middle East has halted this momentum,” IMF chief economist Pierre-Olivier Gourinchas wrote accompanying the fund’s latest World Economic Outlook
Summary
The IMF downgraded its forecast for global growth to 3.1% in 2026 from the 3.3% it had forecast back in January. U.S. and Israeli strikes on Iran, and Tehran’s closing of the Strait of Hormuz and retaliatory strikes on oil refineries and other energy infrastructure in neighboring countries, have driven oil and gas prices sharply higher around the world. As a result, the IMF marked up its expectation for global inflation this year to 4.4% from 4.1% in 2025 and from the 3.8% it had forecast for this year in January. Until the war, the world economy had shown surprising resilience in the face of President Donald Trump’s protectionist policies, which built a wall of import taxes around the United States, the world’s biggest economy and once a market practically wide open to imports.