IMF cuts global growth forecast during Hormuz blockade

The International Monetary Fund (IMF) lowered its global economic growth forecast for 2026 from 3.3% to 3.1% due to escalating tensions between the US and Iran, beginning in late February 2026. Iran's subsequent closure of the Strait of Hormuz and attacks on regional energy infrastructure have driven up oil and gas prices, contributing to a higher global inflation forecast of 4.4%. The IMF anticipates the largest GDP growth declines in countries closest to the conflict and those reliant on energy imports. The Middle East and North Africa's growth forecast was cut by 2.8 points to 1.1%, while Iran's outlook experienced a significant revision, forecasting a 6.1% contraction. The IMF highlights the policy trade-offs between fighting inflation, preserving growth, and supporting those affected by the rising cost of living.