International Monetary Fund Lowers Global Economic Growth Forecast
The International Monetary Fund (IMF) has lowered its global economic growth forecast to 3% in 2026, down from its previous estimate of 3.1% in April, while revising its forecast for the following year upward to 3.4% from 3.2%. Similarly, the IMF has revised its growth forecast for the Middle East and Central Asia downward for 2026, setting it at 0.7% compared to 1.9% in April, while increasing its forecast for 2027 to 6.5% from 4.6%. The Fund explained that the artificial intelligence boom has helped to mitigate the impact of rising energy costs caused by the war, although some countries have been more affected than others. Global oil prices have fallen sharply since the announcement of the agreement protocol between the United States and Iran last month, before rising again due to renewed uncertainty about the chances of peace. This limited slowdown shows that the effects of the war in the Middle East have been partially offset by an acceleration of demand-driven dynamics in the global technology cycle, thanks to developments in artificial intelligence and the expansion of its applications. The report added that oil prices have increased less sharply than some analysts had feared, thanks to withdrawals from strategic reserves. The most affected economies are energy-importing countries that play a minor role in global technology sector supply chains. The IMF also warned that the full effects of the crisis, which have extended to fertilizer prices in addition to fuel costs, have not yet fully materialized, emphasizing that risks remain oriented downward. It particularly highlighted the risk of a resurgence of military hostilities, warning that a resumption of conflict would lead to further increases in commodity prices, persistent volatility, supply shortages, and pressure on exchange rates. The multilateral financial institution cautioned against another possible correction in expectations driven by the technology sector, which could weigh on financial markets and compromise global trade. In such a scenario, investments in high-tech sectors could plummet suddenly, and high valuations in stock markets, particularly in AI-exporting economies and markets where tech companies are concentrated, could undergo a sharp correction.
