Global Growth Forecast Slashed to 3.1%

The International Monetary Fund (IMF) on Tuesday, April 14, 2026, lowered its outlook for the world economy this year, pointing to higher energy and food costs linked to rising tensions between the United States and Iran. The IMF said it now expects global output to grow by 3.1 percent in 2026.

The new projection marks a downgrade from the IMF’s earlier 3.3 percent forecast that was published before the conflict intensified on February 28. The IMF also described the revised estimate as a step down from the 3.4 percent global growth recorded in 2025.

In its report, the IMF tied the weaker outlook to disruptions in energy markets following Iran’s closure of the Strait of Hormuz and attacks on regional energy infrastructure. The IMF said these developments have tightened oil and gas supplies and pushed prices higher, with the effects falling more heavily on countries that depend on imported energy.

The IMF’s country and regional revisions were sharper in parts of the Middle East. Iran’s growth forecast was cut by 7.2 percentage points, shifting to a projected contraction of 6.1 percent. Saudi Arabia’s GDP growth forecast was reduced to 3.1 percent from 4.5 percent.

At the regional level, the IMF lowered its 2026 growth forecast for the Middle East and North Africa by 2.8 points to 1.1 percent. For the broader Middle East and Central Asia grouping, the IMF cut the 2026 growth forecast by 2 percentage points to 1.9 percent.

Outside the region, the IMF said the eurozone is expected to slow to 1.1 percent growth in 2026, compared with 1.4 percent in 2025. The report linked the global downgrade to commodity-price pressures that can transmit across borders through trade, transport, and input costs.

Inflation risks also moved higher in the IMF’s updated view. The IMF now expects global inflation to reach 4.4 percent, which is 0.6 percentage points above its January forecast, citing surging commodity prices and the impact of a stronger U.S. dollar on developing economies.

Key uncertainties remain centered on energy supply conditions and the persistence of price pressures highlighted in the IMF report. The IMF’s updated projections underscore how quickly geopolitical shocks can alter the global macroeconomic picture, particularly for import-dependent economies facing higher fuel and food bills.