IMF lowers growth forecast, flags war-driven risks to global economy
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The International Monetary Fund (IMF) has lowered its global growth forecast for 2026 due to the war in the Middle East. The IMF warns that downside risks will continue to dominate the global outlook, with potential for further economic damage if the conflict expands.
The IMF cut its global growth projection for 2026 from 3.3% to 3.1%. Global headline inflation is expected to rise by 4.4% this year before cooling to 3.7% next year. The war in the Middle East has created a highly volatile situation, prompting the IMF to abandon its traditional baseline scenario. The economic toll will be felt in emerging market and developing economies, with downward growth revisions mostly concentrated in these regions. Advanced economies' forecasts remained broadly unchanged, but could be impacted if the conflict becomes more severe. Regional economies, especially in the Middle East, face sharp growth downgrades.
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