Economy News

IMF cuts world growth to 3.1% as the Iran war hits: who pays the most?

The International Monetary Fund cut its forecast for world economic growth in 2026 to 3.1%, down from 3.3% in January and from 3.4% in 2025, in its World Economic Outlook published on Tuesday 14 April. It blamed the war in the Middle East and the closure of the Strait of Hormuz, which have pushed up energy and food prices. According to Business Today, the IMF says it would otherwise have raised its 2026 forecast to 3.4%. Global inflation is now expected to reach 4.4%, 0.6 points higher than in January.

Al Jazeera lists the sharpest cuts: growth in the Middle East and North Africa falls to 1.1%, Saudi Arabia's to 3.1% from 4.5%, and Iran's economy is expected to shrink by 6.1%. Eurozone growth is put at 1.1% and US growth at 2.3%.

“War in the Middle East has halted this momentum.” — Pierre-Olivier Gourinchas, IMF chief economist, via PBS NewsHour

How each outlet framed it

• Al Jazeera — damage that is “highly uneven”, falling hardest on the conflict region, poor commodity importers and emerging markets.
• PBS NewsHour (AP) — the baseline assumes a short conflict; in a severe case growth could fall to 2% in both 2026 and 2027.
• Axios — the stagflation risk: an adverse case with 2.5% growth and 5.4% inflation, and the US looking relatively resilient as a net energy exporter.
• Business Today — from India, the burden on vulnerable emerging economies and the call for targeted support.

Where the numbers differ: AP and Al Jazeera describe the 2.3% US forecast as a 0.1-point downgrade; Axios calls it a 0.1-point upgrade.

What happened next: On 8 July the IMF trimmed its 2026 forecast again, to 3.0%, and raised its inflation forecast to 4.7%, Gulf Times reported, carrying Reuters.