The International Monetary Fund (IMF) has modestly downgraded its outlook for the world economy this year, citing the energy shock caused by the Iran war. However, the fallout from the conflict is being partially offset by booming investment in artificial intelligence and other technologies.

Global Economic Outlook

The IMF now expects the global economy to expand by a sluggish 3% in 2026, down from 3.5% last year and from the 3.1% it had forecast for this year back in April. The fund expects worldwide growth to rebound to 3.4% next year.

The energy shock caused by the Iran war has led to higher energy prices, squeezing businesses and consumers. The IMF now expects oil prices to be up nearly 32% this year and for global consumer prices overall to increase 4.7% in 2026.

Countries that produce and export their own energy, such as the United States, are insulated from the war’s economic damage. The IMF expects the U.S. economy to grow a solid 2.3% this year, up from 2.1% in 2025 and unchanged from the April forecast.

Original reporting: KTBS 3 (Shreveport) — read the source article.