WASHINGTON (AP) – The International Monetary Fund on Wednesday slightly revised down its outlook for this year’s global economy, citing energy shocks in the global economy. iran war. However, the fallout from the conflict is being partially offset by a surge in investment. artificial intelligence and other technologies.
The IMF currently expects global economic growth to remain at 3% in 2026, slowing from 3.5% in the previous year and 3.5% last year. As of April, the forecast for this year was 3.1%.. The fund expects global growth to rebound to 3.4% next year.
Iran responded to the US and Israeli attacks on February 28 by shutting down Iran. Strait of Hormuzthrough which one-fifth of the world’s crude oil and natural gas flows. Energy prices have soared, putting pressure on businesses and consumers. The IMF currently expects oil prices to rise by nearly 32% this year, and overall global consumer prices to rise by 4.7% in 2026. This is up from 4.1% in 2025, meaning two years of progress against inflation has stalled.
The IMF’s forecast assumes that the Strait of Hormuz will reopen later this month. US strikes resume against Iran And President Donald Trump declared Wednesday that the ceasefire with Iran has ended. They also assume that trade through the Strait will return to normal by March next year.
“The global economy weathered the shock of the war better than feared. The economic damage from the energy shock was limited, in part because countries were able to draw on existing oil reserves and oil exporters outside the Persian Gulf increased production,” Petya Koeva-Brooks, deputy director of the IMF’s research department, told reporters on Wednesday.
Countries that produce and export their own energy and benefit from AI investments are shielded from the economic damage of war. This includes the United States. The IMF expects the US economy, the world’s largest, to grow at a solid 2.3% this year, up from 2.1% in 2025, unchanged from its April forecast. President Donald Trump’s Tax cuts due in 2025, significant productivity gains and a strong stock market are also boosting the U.S. economy.
of 21 European countries Countries that share the euro currency, which has been hit hard by soaring energy prices, are collectively expected to grow by just 0.9% this year, revised down from 1.4% in 2025.
ChinaThe world’s second-largest economy is expected to grow 4.6% this year, down from 5% in 2026 but slightly faster than the IMF predicted in April. China’s economy has been weighed down by soaring energy prices and a collapsing real estate market, but this is being offset by a surge in public works spending, high-tech manufacturing and strong exports.
India India is once again projected to be the world’s fastest-growing major economy, growing at 6.4% (down from last year’s blistering 7.7%) on strong consumer spending.
The IMF is the lending institution of 191 countries and works to promote economic growth and financial stability and reduce global poverty.
