The International Monetary Fund projects the global economy will grow by 3.0 percent in 2026 and 3.4 percent in 2027, with technology investment offsetting part—but not all—of the economic drag from the war in the Middle East.
The July World Economic Outlook Update describes two opposing forces. Energy disruptions are weighing most heavily on import-dependent and vulnerable economies, while investment linked to artificial intelligence is supporting countries connected to the global technology supply chain. The result is a global projection that is broadly unchanged on a cumulative basis from April but increasingly uneven among countries.
Projected growth remains below the 3.5 percent average recorded in 2024 and 2025. The IMF expects a weaker 2026 followed by a rebound in 2027, rather than a uniform expansion across regions.
The inflation outlook deteriorated. Global headline inflation is projected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before easing to 3.9 percent in 2027. The IMF said the global disinflation trend in place since early 2024 had stalled, largely because of higher energy and food prices.
These forecasts depend on explicit assumptions. The baseline anticipated that the Strait of Hormuz would begin reopening in mid-July and return to pre-war conditions by March 2027. Its commodity assumptions used market prices as of June 10, including an average oil price of $89 a barrel for 2026. Different conflict, shipping or energy-market outcomes could produce different results.
The projections are conditional scenarios, not guarantees. The IMF recommended that central banks remain focused on price stability while adapting their responses to domestic conditions, and urged governments to rebuild fiscal room and use energy support temporarily and selectively.