IMF Lowers 2026 Global Economic Outlook Amid Iran War Risks

The International Monetary Fund lowered global economic growth expectations for 2026 as the impact of the Middle East war will likely counter a boost from rising artificial intelligence adoption. The IMF now projects real gross domestic product for the world to grow by 3% this year, down 0.1 percentage points from its prior forecast in April. The latest projection represents a slowdown from a 3.5% rate in 2025, according to the IMF. "The modest slowdown reflects the effects of the war in the Middle East being partly offset by accelerated demand-driven momentum in the global technology cycle, thanks to advances in artificial intelligence and its adoption," the IMF wrote in its latest world economic outlook update Wednesday. "The impact varies widely based on countries' exposure to the war and position in the technology value chain." US growth is projected at 2.3% in 2026, unchanged from April. President Donald Trump threatened additional strikes against Iran on Wednesday following renewed hostilities between Washington and Tehran. Trump said the memorandum of understanding agreed with Iran last month is "over." For 2027, the IMF expects global GDP to accelerate to 3.4%, up.