The International Monetary Fund (IMF) has lowered its forecast for global economic growth this year due to the war in Iran, while the consequences of that conflict and the energy crisis are being partially mitigated by the development of artificial intelligence (AI) and other technologies.
The IMF announced yesterday that it expects the global economy to grow by three percent in 2026, which is a decrease compared to 3.5 percent last year, as well as to 3.1 percent estimated in April.
It is expected that due to the conflict between Iran, the United States (US), and Israel over the Strait of Hormuz, through which one fifth of the world’s oil passes, fuel prices will rise by almost 32 percent, and that global consumer prices overall will increase by 4.7 percent in 2026.
This would represent an increase compared to 4.1 percent in 2025 and would mean that two years of progress in the fight against inflation have stalled.
The IMF forecasts assume that the Strait of Hormuz will reopen later this month, even though US strikes on Iran have continued, and that trade will return to normal by March next year.
The IMF expects that the US economy, the largest in the world, will record solid growth of 2.3 percent this year, which is higher than the 2.1 percent in 2025 and unchanged from the April forecast.
For the 21 European countries that use the euro, which have been affected by higher energy prices, a combined economic growth of 0.9 percent is forecast for this year, which is a decrease compared to 1.4 percent in 2025.
China, the world’s second largest economy, is expected to record growth of 4.6 percent this year – down from 5 percent in 2025, but still somewhat faster growth than the IMF predicted in April.
India will once again be the fastest-growing economy in the world, with a rate of 6.4 percent, according to IMF estimates.
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