IMF lowers 2026 global growth forecast due to Middle East conflict

The International Monetary Fund (IMF) released its World Economic Outlook report during its spring meetings in Washington, lowering its 2026 global growth projection from 3.3% to 3.1%. This downward revision is attributed to the ongoing conflict in the Middle East, specifically the war involving Iran and the closure of the Strait of Hormuz, which have disrupted energy markets. The baseline scenario projects inflation at 4.4% for 2026 and 3.7% for 2027, with average oil prices expected to reach $82 per barrel this year. However, the IMF warned that in more adverse scenarios, where energy prices remain high, global growth could slow to 2.5% or 2%. In extreme cases cited by reports, oil prices could average $110 per barrel in 2026 and $125 in 2027, potentially driving inflation up to 6%. The IMF noted that if growth falls below 2%, the world risks a recession, an event that has occurred only four times since 1980.