Opening Remarks at the July 2026 WEO Update Press Conference

IMF News, July 8, 2026

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"We are projecting global growth of 3.0 percent in 2026 and 3.4 percent in 2027 — broadly unchanged from April on a cumulative basis."
Later restated: "We are projecting global growth of 3 percent in 2026 and 3.4 percent in 2027, broadly unchanged from April on a cumulative basis."
Characterization: "In effect, we expect a V-shaped recovery: weaker growth this year relative to our pre-war forecast, followed by a rebound next year."
Net effect varies across countries depending on exposure to the war in the Middle East and position in the technology value chain.

"Global headline inflation has been revised up to 4.7 percent this year, while our core inflation forecast is broadly unchanged."
Assessment: "Put simply, the disinflation trend that has been in place since early 2024 has stalled."

Two powerful forces shaping the outlook: "the lingering effects of the energy shock from the war in the Middle East and a technology-driven investment boom."
Resilience factors cited:
- Inventory drawdowns and expanded production outside the Gulf helped avoid a larger spike in oil prices.
- "A steady rise in the renewable energy share, combined with lower energy intensity than just a few years ago, has also made many economies more resilient."
- Financial conditions "tightened sharply in April, they have since eased and remained supportive by historical standards."
Forecast assumptions:
- "The Strait of Hormuz begins reopening in mid-July, with conditions normalizing to the pre-war state by March of 2027."
- "Commodity price assumptions are based on market pricing as of June 10th, which implied an average oil price of $89 a barrel for 2026."
- Assumes "policy and geopolitical uncertainty remain elevated throughout 2027 and that the AI-driven technology cycle moderates from here with no exogenous boost to productivity."
- Note on futures: "the futures curve since shifted down a bit."

Downside risks (tilted to the downside):
- "A renewed escalation in the conflict could reignite commodity price volatility, tighten financial conditions, strain policy buffers, and worsen food insecurity in low-income countries."
- "A market correction driven by a reassessment of AI profitability is another key downside risk."
Upside scenarios:
- "Faster AI adoption could lift growth."
- "A swifter than expected normalization of trade through the Strait of Hormuz would also be a positive surprise."

Monetary policy: "Central Banks should remain focused on price stability, though the appropriate response will vary by country depending on how commodity prices, the tech-driven demand, and inflation expectations interact."
Fiscal policy:
- Many governments "have deployed fiscal tools in response to the war, so far at limited cost."
- Recommendation: "As the shock fades, energy-related fiscal support should be unwound, and rebuilding fiscal space remains essential given elevated debt."
Structural policy: "Over the medium term, advancing structural reforms, including the energy transition, and addressing domestic imbalances will be critical to strengthen resilience and sustain balanced growth."

Opening Remarks at the July 2026 WEO Update Press Conference — Petya Koeva Brooks, July 8, 2026