Global Inflation and Growth

The International Monetary Fund this week cut its 2026 global growth forecast, saying the energy-price shock from the Iran war has weakened the outlook and raised inflationary pressures. In the fund’s latest update the baseline was pared to roughly 3.1% growth for 2026, a downward revision of about 0.2 percentage points that some economists have translated into roughly a $200 billion hit to global output; the IMF also raised its 2026 inflation projection to about 4.4%. The fund warned that if the conflict escalates and energy markets are further disrupted, downside scenarios could push growth into recession territory — analysts have sketched worse cases ranging from around 2.5% to as low as 2.0% if oil prices sustained near $100 per barrel.