World economy expected to grow sluggish 3% this year, IMF says
Summary
The International Monetary Fund (IMF) lowered its forecast for global economic growth this year to 3% due to higher energy prices caused by the war in Iran. However, growth in technology investments such as artificial intelligence is helping balance the negative effects. The IMF predicts the economy will grow faster next year, around 3.4%.Key Facts
- The IMF reduced its global growth forecast for 2026 to 3%, down from 3.5% last year.
- The energy shock comes from the Iran war and the closure of the Strait of Hormuz, a key route for oil and gas.
- About one-fifth of the world’s crude oil and natural gas moves through the Strait of Hormuz.
- Oil prices are expected to rise nearly 32% this year due to the conflict.
- Higher energy costs have increased inflation, with consumer prices predicted to rise 4.7% in 2026.
- Inflation progress made in previous years is now stalled.
- Investment growth in artificial intelligence and other technologies is helping offset some economic setbacks.
- The IMF expects global growth to improve to 3.4% in 2027.
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