The IMF warned that ongoing risks posed by the war in the Middle East, could cause trade fragmentation, extend commodity price volatility and further disrupt supply chains, raise prices and weigh on global financial conditions.
The International Monetary Fund (IMF) on Wednesday inched its 2026 global growth forecast lower to 3%, a figure that has fallen from 3.3% at the start of the year, while it said the global disinflation trend since early 2024 has stopped.
The IMF warned at the release of its global economic outlook that ongoing risks posed by the war in the Middle East could cause trade fragmentation, extend commodity price volatility, and further disrupt supply chains, raise prices, and weigh on financial conditions. A fragile peace agreement between the US and Iran appeared broken on Wednesday when renewed attacks by the US in Iran followed Iran's attacks on vessels transiting through the Strait of Hormuz.
The IMF said a possible correction in technology-driven expectations added to the downside risks for the outlook, whereas eroded policy buffers could also amplify those risks.
The global lender said the world economy had dodged a sharper downturn as a result of the war, with demand-driven momentum in the tech sector, driven by the growing use of AI, helping to offset a war-related drop in energy supplies.
