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IMF cuts 2026 growth forecast as Iran war lifts oil outlook
The IMF expects oil prices to average about 32% higher this year and global consumer prices to rise 4.7%, tightening inflation after two years of cooling.
The International Monetary Fund downgraded its forecast for 2026 global economic growth to 3.0%, down from 3.5% previously forecast for 2025, citing the expected economic drag from the Iran war.
According to IMF projections cited by OilPrice, oil prices are expected to average about 32% higher in the current year versus the previous year. The IMF also projects global consumer prices to rise 4.7%, which would end two years of cooling inflation.
The outlook differentiates between regions, with the U.S. economy projected to expand 2.3% in 2026, slightly faster than 2.1% growth in 2025, supported by favorable fiscal policy and ongoing AI-led investment tied to productivity gains. The IMF notes the United States is a net energy exporter, making it less exposed than many peers to overseas supply disruptions and higher oil prices.
By contrast, the Eurozone is projected to grow 0.9% in 2026, down from 1.4% in 2025, with high energy costs weighing on activity. OilPrice attributes the weaker growth to the Eurozone's vulnerability to energy price swings because it imports much of the oil and gas it consumes.