IMF Cuts Global Growth Outlook:
The International Monetary Fund cut its global growth outlook, warning that the world economy is drifting toward a more adverse scenario due to the West Asia conflict, which it cautioned could trigger the largest energy crisis in modern times.
- The revision is driven by energy price spikes and disruptions in oil supply, especially the Strait of Hormuz, due to ongoing conflict.
Without the conflict, the IMF would have upgraded growth by 0.1 percentage point to ~3.4%, supported by strong technology investment, lower interest rates, and fiscal support. - However, global growth for 2026 has now been cut by about 20 basis points to ~3.1%, inflation is expected to rise before moderating, and emerging economies are likely to be more adversely affected.
- The IMF outlined three scenarios—“weaker, worse and severe”—depending on how the conflict evolves.
