Overview
- The IMF finalized its mid‑year World Economic Outlook on Wednesday and cut global growth for 2026 to 3.0%, down from April’s 3.1% estimate.
- The fund said an energy shock linked to the US‑Iran conflict and reduced flows through the Strait of Hormuz are the main drag, raising headline inflation and supply‑risk concerns.
- The IMF projects global headline inflation at 4.7% in 2026 and models an average petroleum spot price near $89 per barrel and natural gas around $15, warning that renewed escalation would worsen volatility.
- The report credits a concentrated US‑led AI investment boom with supporting demand and productivity, producing sharply uneven effects across countries depending on energy exposure and tech linkages.
- At the national level the IMF left Pakistan’s FY2026‑27 growth forecast at 3.5%, below the government’s 4% target, and urged policymakers to preserve price stability, rebuild fiscal buffers, and prepare for downside risks if the Strait of Hormuz stays constrained.