Overview
- The IMF's July World Economic Outlook update lowered 2026 global GDP growth to 3.0% and raised headline inflation to 4.7%, while projecting a rebound to 3.4% in 2027.
- The fund said the downgrade reflects an energy shock from the US‑Israel‑Iran conflict that stalled traffic through the Strait of Hormuz and pushed oil and gas prices higher.
- The IMF's baseline assumes the Strait of Hormuz will begin to reopen in mid‑July and return to prewar conditions by March 2027, a timing it says is central to the forecast.
- Rapid, concentrated investment in artificial intelligence and related tech has partly offset the shock for tech‑integrated economies, producing sharply uneven outcomes across countries.
- The fund warned risks remain tilted to the downside after renewed US strikes and political moves raised the chance of resumed fighting, and separate forecasts such as Deloitte's now expect persistently weak near‑term growth for Australia.