IMF Lowers 2026 Global Growth Forecast to 3.1 Pct

Washington, April 14 (Jiji Press)–The International Monetary Fund on Tuesday lowered its global economic growth forecast for 2026 to 3.1 pct, down 0.2 percentage point from its previous projection in January. The forecast assumes that an oil price spike triggered by U.S.-Israel strikes on Iran will be short-lived, according to the IMF’s latest World Economic Outlook report. The IMF also warned of a strong probability that a prolonged Middle East conflict could sharply slow the global economy. If crude oil prices average around 100 dollars per barrel in 2026 and ease only modestly in the following year, global growth in 2026 would decelerate to 2.5 pct, it said. Under such a scenario, global inflation would climb to 5.4 pct, far above the baseline forecast of 4.4 pct. Meanwhile, if crude oil prices average 110 dollars in 2026 and climb further in 2027, growth would hover near 2 pct over the next two years, leaving the world on the brink of a recession, the report said. IMF chief economist Pierre-Olivier Gourinchas said that the magnitude of the shock will hinge on the duration and scale of the conflict and how quickly energy production and supply normalize. Under the baseline scenario, Japan’s economy is forecast to grow 0.7 pct in 2026, unchanged from the previous report. The IMF lowered its 2026 growth forecast for the United States to 2.3 pct and China to 4.4 pct, each trimmed by 0.1 point. The IMF projected that the Middle East would be affected significantly by the de facto closure of the Strait of Hormuz and U.S.-Israeli strikes on Iran and Iranian retaliation. Saudi Arabia, a major global oil producer, was forecast to see its economy grow 3.1 pct in 2026, down 1.4 points, while Iran, Iraq, Qatar and Kuwait are seen posting negative growth. END [Copyright The Jiji Press, Ltd.]