""Prior to the war, we were poised to upgrade our global growth forecast," the IMF says in its latest World Economic Outlook, pointing to a tech investment boom, easing trade tensions and buoyant financial markets. "War in the Middle East will overwhelm these underlying forces.""
""The closing of the Strait of Hormuz and serious damage to critical facilities in a region central to global hydrocarbon supply raise the prospect of a major energy crisis should hostilities continue," Gourinchas said."
""The IMF notes the 'unevenness' of America's relative strength. It comes alongside weak jobs growth and a shrinking labor force - a combination that raises questions about the durability of that strength.""
The IMF has reduced its global growth forecast by 0.2 percentage points to 3.1% for 2026, citing the war in the Middle East as a major factor. The conflict has halted economic momentum, with potential energy crises looming due to disruptions in the Strait of Hormuz. Inflation projections have also increased, with a rise to 4.4% expected this year. The U.S. economy is projected to grow 2.3%, but inflation is anticipated to average 3.2% in 2026, raising concerns about economic stability.
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