Press Briefing Transcript: World Economic Outlook (WEO) Update, July 8, 2026
IMF News, July 8, 2026
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Bibliographic details
- Published: July 8, 2026
Overview
- Report title: Global Economy in the Cross Currents of War and Technology.
- IMF leadership note: Silvana Tenreyro appointed as next IMF Economic Counselor and Director of the Research Department; expected to join the Fund on August 10th.
- Update type: July WEO Update refreshes the outlook for a subset of economies (list on page 14 of the report).
Global projections and outlook
- Global growth projections:
- 3 percent in 2026.
- 3.4 percent in 2027.
- Characterized as a "V-shaped recovery" (weaker growth in 2026 relative to pre-war forecast, followed by rebound in 2027).
- Inflation:
- Global headline inflation revised up to 4.7 percent in 2026.
- Core inflation forecast broadly unchanged.
- Disinflation trend since early 2024 has stalled.
- Commodity price and market assumptions:
- Commodity price assumptions based on market pricing as of June 10th.
- Average oil price implied for 2026: $89 a barrel.
- Forecast assumes Strait of Hormuz begins reopening in mid-July and conditions normalize to the pre-war state by March of 2027.
- Financial conditions:
- Tightened sharply in April, then eased and remained supportive by historical standards.
Key assumptions and scenarios
- Baseline assumptions:
- Market pricing locked in as of June 10th.
- Strait of Hormuz reopening mid-July; normalization by March of 2027.
- AI-driven technology cycle moderates from current pace with no exogenous boost to productivity.
- Policy and geopolitical uncertainty remain elevated throughout 2027.
- Scenario dynamics highlighted:
- Net effect of war-related energy shock and AI-driven technology boom varies significantly across countries depending on exposure to the war and position in the technology value chain.
Risks (tilted to the downside)
- Downside risks:
- Renewed escalation in the conflict could reignite commodity price volatility, tighten financial conditions, strain policy buffers, and worsen food insecurity in low-income countries.
- Market correction driven by a reassessment of AI profitability.
- Potential for higher oil prices to unanchor inflation expectations and prompt financial conditions corrections.
- Upside risks:
- Faster AI adoption could lift growth.
- Swifter-than-expected normalization of trade through the Strait of Hormuz would be a positive surprise.
- Monitoring priorities:
- Inflation expectations across market, household, and firm measures—especially medium- and long-run expectations—will be monitored closely.
Policy recommendations
- Monetary policy:
- Central Banks should remain focused on price stability; appropriate response will vary by country depending on interaction of commodity prices, tech-driven demand, and inflation expectations.
- Central Bank communications and forward guidance remain important in a high-uncertainty environment; modalities of forward guidance may need revisiting as information evolves.
- Fiscal policy:
- Energy-related fiscal support should be unwound as the shock fades.
- Rebuild fiscal space given elevated debt levels.
- Structural policies:
- Advance structural reforms, including the energy transition and addressing domestic imbalances, to strengthen resilience and sustain balanced growth.
Regional and country highlights (selected figures preserved exactly as stated)
- Middle East and North Africa (MENA) / Middle East and Central Asia:
- Regional growth: 3.7 percent in 2025 to 0.7 percent in 2026 and 6.5 percent in 2027.
- Revision vs April: downward revision of 1.2 percentage points for 2026 and upward revision of 1.9 percentage points for 2027.
- Country notes:
- Iraq, Kuwait, Qatar: projected sharp contractions in 2026 followed by double-digit expansions in 2027 (disruptions to energy output and transportation).
- Saudi Arabia: 1.7 percent for 2026 and 5.5 percent for 2027.
- Iran: projection reflects contraction of 5.4 percent in 2026 (better outturn of oil exports in March and April supported growth this year but smaller rebound next year).
- Egypt:
- 2026 (fiscal year '25-'26): 4.6 percent (upward revision of 0.4).
- 2027: 4.4 percent (downward revision of 0.4).
- 2026 upward revision driven by stronger-than-expected third-quarter outturn in fiscal year; 2026-27 shows impact of the war through weaker investment, higher financing costs, and uncertainty.
- India:
- 2026: 6.4 percent (revised down by 0.1 percentage point).
- 2027 / medium-term: medium-term growth estimated at around 6.5 percent.
- Downward near-term effect driven by higher energy prices and pass-through to pump prices.
- Korea (Republic of Korea):
- 2026: 2.6 percent (upward revision of 0.7 percentage point).
- 2027: 2.5 percent (upward revision of 0.4 percentage point).
- Strong AI hardware exports and investment drove upward revisions; downside risk if AI cycle corrects.
- China:
- 2026: 4.6 percent (up from 4.4 percent in April forecast).
- Q1 outturn: 5 percent year-on-year, supporting upward revision.
- Offset risks from higher global oil prices and weaker external demand.
- Sub-Saharan Africa:
- Regional growth: acceleration to 4.5 percent in 2025, projected softening to 4.3 percent in 2026.
- Drivers of softness include higher energy and fertilizer prices affecting agriculture and planting seasons.
- Country examples:
- Nigeria: expected to grow at 4.1 percent (supported by improved macro stability and favorable terms of trade as an oil exporter).
- South Africa: expected to remain stable at 1.1 percent (supported by strengthened policy frameworks and structural reforms).
- Challenge: many Sub-Saharan countries remain largely absent from AI-driven technology upswing and face reduced official development assistance.
- Europe:
- Italy: 0.5 percent in 2026 and 0.5 percent in 2027 (forecast unchanged since April).
- Spain: 2.1 percent in 2026 and 1.8 percent in 2027 (forecast unchanged).
- United Kingdom: 1.0 percent in 2026 (upward revision of 0.2) and 1.3 percent in 2027.
- Western Hemisphere:
- Argentina:
- 2026: 3.5 percent (forecast broadly unchanged).
- 2027: 4.0 percent.
- Disinflation expected to resume, with inflation reaching 25 percent by the end of 2026 and converging to single digits by late 2028 under policy reforms.
- Brazil:
- 2026: 2.4 percent (upgraded by 0.5).
- 2027: 2.2 percent (upgraded).
- Mexico:
- 2026: 1.2 percent.
- 2027: 1.9 percent.
- Downward revisions due to weaker-than-expected Q1 and prospects for protracted USMCA review.
Communication and next steps
- IMF monitoring:
- IMF will monitor developments closely and update assumptions as needed in the next forecasting round.
- Availability:
- World Economic Outlook Update and supporting materials available on IMF.org.
Press Briefing Transcript: World Economic Outlook (WEO) Update, July 8, 2026