Energy-importing nations without AI involvement face weakening growth
Three months after its last revision, the International Monetary Fund has again lowered its expectations for the world economy, trimming 2026 global growth to 3 percent as the war in West Asia continues to press upon energy markets and supply chains. The near-blockade of the Strait of Hormuz — through which a third of the world's seaborne oil flows — has proven a wound that artificial intelligence's momentum cannot fully close. Inflation, meanwhile, is expected to climb to 4.7 percent, a reminder that conflict rarely confines its costs to the battlefield. The fund holds out the possibility of a 3.4 percent rebound in 2027, but only if the guns quiet and the waters reopen.
- American and Israeli strikes on Iran have triggered a near-blockade of the Strait of Hormuz, sending oil prices surging and forcing the IMF to cut its global growth forecast for the second time this year.
- The damage is uneven and deepening: emerging Asian economies saw retail gasoline prices jump 30 percent, while West Asia and Central Asia face growth of just 0.7 percent — a sharp downgrade of 1.2 percentage points.
- Artificial intelligence is acting as a genuine counterweight, with Taiwan, South Korea, Thailand, and Malaysia showing surprising resilience, but the tech boom cannot fully absorb the war's economic toll.
- Global inflation is now projected to accelerate to 4.7 percent, complicating the picture even as the IMF's research chief describes the expected recovery as V-shaped — contingent on hostilities easing.
- Fresh exchanges of fire between the United States and Iran erupted just as the forecasts were being finalized, leaving the IMF's own division chief to warn that the outlook could shift again before the ink dries.
The International Monetary Fund cut its 2026 global growth forecast to 3 percent on Wednesday, down from the 3.1 percent it had projected in April — the second downward revision this year. The culprit is the war in West Asia, where strikes on Iran since late February have provoked retaliation and a near-blockade of the Strait of Hormuz, the narrow passage carrying roughly a third of the world's seaborne oil. Artificial intelligence continues to generate pockets of strong activity, but the fund concluded it has not been enough to offset the damage. Global inflation is now expected to reach 4.7 percent, higher than previously anticipated.
The war's economic footprint is deeply uneven. Energy exporters outside the conflict zone have benefited from rising oil prices, while energy-importing nations with little stake in the AI boom have seen growth weaken. Retail gasoline prices climbed 30 percent in emerging Asia versus 15 percent in Latin America. Growth in West Asia and Central Asia was downgraded by 1.2 percentage points to just 0.7 percent. The United States is still projected to expand 2.3 percent; China received a slight upward revision to 4.6 percent; the euro area was trimmed to 0.9 percent.
Despite the gloom, IMF division chief Deniz Igan described the expected trajectory as V-shaped, with growth projected to rebound to 3.4 percent in 2027 if hostilities ease and the strait returns to normal. Technology supply-chain hubs — Taiwan, South Korea, Thailand, and Malaysia — have shown resilience that surprised the fund, underscoring that the AI boom remains a real economic engine even amid conflict. Igan cautioned, however, that her forecasts preceded fresh exchanges of fire between the United States and Iran, and that the outlook could shift again. The fund's broader message: the world has absorbed the initial shock better than feared, but the full consequences have not yet passed through.
The International Monetary Fund delivered a sobering assessment of the global economy on Wednesday, cutting its growth forecast for 2026 to 3 percent—down from the 3.1 percent it had projected just three months earlier in April. The downgrade reflects a world still reeling from the war in West Asia, where American and Israeli strikes on Iran since late February have triggered Iranian retaliation and, most critically, a near-blockade of the Strait of Hormuz, the narrow waterway through which roughly a third of the world's seaborne oil passes. Even as artificial intelligence continues to drive pockets of robust economic activity, the fund concluded, it has not been enough to fully compensate for the damage wrought by conflict and the resulting surge in energy prices.
This marks the second time in 2026 that the IMF has revised downward its expectations for global growth. The new estimate also represents a cooling from last year's performance, when the world economy expanded faster. Compounding the slowdown, global inflation is now expected to accelerate to 4.7 percent this year, higher than previously anticipated. The picture is one of an economy grinding forward but at a noticeably reduced pace, with the war's ripple effects still spreading through supply chains and energy markets.
Yet the overall contraction remains modest, according to Deniz Igan, the division chief at the IMF's research department. She described the expected recovery as V-shaped, with global growth projected to rebound to 3.4 percent in 2027 if hostilities ease and the Strait of Hormuz returns to normal operations. The war's delayed consequences—longer disruptions to shipping, sustained price pressures—are the primary reason the world economy will take a larger hit this year than initially feared. Igan cautioned, however, that her forecasts were made before fresh exchanges of fire between the United States and Iran erupted in recent hours, suggesting the outlook could shift again.
The war's economic footprint is far from uniform. Energy-exporting nations outside the conflict zone have benefited from favorable terms of trade as oil prices climbed. Countries deeply embedded in the technology supply chain—even if they import energy—have experienced stronger economic activity. But energy-importing nations with limited involvement in the artificial intelligence boom have seen their growth weaken. The disparities are stark: retail gasoline prices jumped 30 percent in emerging Asia after the war began, compared to just 15 percent in Latin America. The United States economy is still expected to expand 2.3 percent this year, but growth in West Asia and Central Asia has been downgraded sharply by 1.2 percentage points to just 0.7 percent. The euro area is set to grow 0.9 percent, also revised downward, with France's growth pegged at 0.6 percent—0.3 percentage points lower than expected. China, the world's second-largest economy, bucked the trend with a slight upward revision to 4.6 percent growth.
The technology sector has provided a crucial counterweight to the war's damage. Taiwan, South Korea, Thailand, and Malaysia—the world's top four net exporters of AI-related hardware—have demonstrated resilient growth despite their exposure to supply chain disruptions. This resilience has surprised the fund and suggests that the artificial intelligence boom, while unable to fully offset the war's costs, remains a genuine economic engine.
Looking ahead, the IMF warned that the risks remain substantial. The possibility of renewed conflict in the Middle East looms large and could extend commodity price volatility, threaten supply chains further, and weigh on financial conditions. Trade fragmentation could accelerate as well, risking higher prices across the board. The release of strategic petroleum reserves has provided some relief amid reduced energy flows, but weakness could still emerge. Igan characterized the expected uptick in inflation as merely a pause in the longer-term disinflation trend, not a fundamental break from it. The fund's message is clear: the global economy has weathered the initial shock from the West Asia war better than feared, but the full effects have not yet passed through, and the risk of further deterioration remains real.
Citas Notables
The global picture blurs glaring differences across countries— International Monetary Fund
The possibility of renewed Middle East conflict looms large and could extend commodity price volatility and threaten supply chains— International Monetary Fund
La Conversación del Hearth Otra perspectiva de la historia
Why does a war in one region drag down growth everywhere? Isn't the global economy supposed to be diversified now?
It is, but energy isn't. A third of the world's oil moves through the Strait of Hormuz. When that waterway gets choked off, oil prices spike everywhere—and that hits every economy that imports energy, which is most of them. You can't diversify away from physics.
So the AI boom should have helped offset that, right? Why hasn't it?
It has, partially. But AI is concentrated. Taiwan, South Korea, Thailand, Malaysia—they're the ones really benefiting. If you're an energy importer without a seat at that table, you're just paying more for fuel with no offsetting gains.
The IMF cut growth from 3.1 to 3 percent. That sounds small. Why does it matter?
At the global scale, tenths of a percentage point matter enormously. That's the difference between millions of jobs created or lost, between countries staying stable or tipping into recession. And it's the second cut this year. The trend is what worries them.
They're predicting recovery to 3.4 percent in 2027. Do they actually believe that?
They believe it if the Strait of Hormuz reopens and hostilities don't resume. But they said that before the latest Iranian attacks on ships. The forecast is conditional on peace holding. That's a big condition.
What about inflation at 4.7 percent? Isn't that high?
It's elevated, but the IMF sees it as temporary—a pause in a longer cooling trend, not a reversal. The real danger is if the war drags on and keeps pushing energy prices higher. Then inflation becomes structural, harder to break.