IMF Cuts 2026 Global Growth Forecast to 3% on the Iran War

In its July update to the World Economic Outlook, the International Monetary Fund cut its 2026 global growth forecast to 3%, down from 3.1% in April and its second reduction this year, citing the energy shock from the US-Iran war. The report says energy prices are now about 25% above pre-war levels; the fund assumes an average oil price of about $89 a barrel for 2026 and that the Strait of Hormuz begins reopening from mid-July.

Earlier, the World Bank had cut its own 2026 growth forecast to 2.5%, calling it the worst hit to the global economy since the COVID-19 pandemic. Slower global growth can weigh on Iran's economy through oil demand and trade.