The International Monetary Fund (IMF) left its global growth forecast largely unchanged for this year, saying that the boom in artificial intelligence helped offset the fallout from the conflict in the Middle East.<\/p>\n
\u201cGlobal economic activity and the outlook are being shaped by two major forces, pushing in opposite directions with asymmetric effects across countries,\u201d the Washington-based lender said in an update to its World Economic Outlook report published Wednesday.<\/p>\n
\u201cThe global economy as a whole has, so far, weathered the shock from the war better than feared.\u201d<\/p>\n
The fund expects growth of 3% in 2026, slightly down from the 3.1% predicted in April and a slowdown from the 3.5% average recorded over the previous two years. But the IMF cautioned that risks are \u201cstill tilted to the downside.\u201d<\/p>\n
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The report, which was finalised before the latest flare-up between the US and Iran, cited the prospect of renewed tensions in the Middle East, further trade fragmentation and the possible unraveling of AI-driven expectations.<\/p>\n
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The US completed a fresh round of strikes following a series of attacks on merchant ships in the Strait of Hormuz, and US President Donald Trump said the tentative ceasefire with Iran had ended as far as he\u2019s concerned.<\/p>\n
He said Wednesday that the US would probably launch further strikes on Iran, ratcheting up pressure on Tehran and raising the prospect of a return to all-out war.<\/p>\n
Read: Emerging stocks reclaim pre-war peak on Hormuz deal hopes, AI expectations<\/p>\n
\u201cWhat we\u2019re seeing with the most recent developments overnight is that there is, of course, still a lot of uncertainty,\u201d Petya Koeva Brooks, deputy director of the IMF\u2019s research department, said in an interview on Bloomberg Television.<\/p>\n
\u201cRisks are very high,\u201d she said, adding that an escalation in the conflict is a \u201cprimary driver\u201d of those downside risks.<\/p>\n
Higher inflation<\/span><\/strong><\/p>\n Progress in bringing inflation down, meanwhile, has stalled. The IMF expects higher global consumer prices, raising its projections to a 4.7% gain this year from 4.4% previously, mainly due to energy and food costs.<\/p>\n The most significant downgrades in the growth outlook were in the Middle East region. Saudi Arabia saw its 2026 projection cut by 1.4 percentage points to 1.7% from 3.1% previously. Meanwhile, the IMF left its projection for the US unchanged at 2.3%.<\/p>\n ADVERTISEMENT:<\/p>\n CONTINUE READING BELOW<\/p>\n<\/div>\n<\/div>\n Much of what the lender called a \u201cpositive surprise\u201d was concentrated in Asia among a few economies that are plugged into the AI supply chain, with exporters of related hardware outperforming in spite of their exposure to energy and trade disruptions linked to the war.<\/p>\n Read: World economy faces softer landing as IMF revises forecast<\/p>\n Among them is South Korea, whose economy rose an annualized 7.5% in the first quarter, more than four times the 1.8% projected in April, \u201cdespite its heavy reliance on imported energy from the Middle East\u201d, the IMF said.<\/p>\n Thailand, Malaysia and Taiwan also outpaced expectations, benefiting from booming demand for AI-related equipment.<\/p>\n Growth for Thailand this year was revised up to 1.9% from 1.5%, reflecting emergency fiscal measures and robust technology-related exports and investment, the report said. Malaysia will benefit from a data center boost.<\/p>\n Meanwhile, the lender increased its global growth outlook for 2027 to 3.4% from 3.2% in April.<\/p>\n \u00a9 2026 Bloomberg<\/p>\n<\/p><\/div>\n #IMF #helps #offset #wardriven #slowdown #sees #risks<\/p>\n","protected":false},"excerpt":{"rendered":" The International Monetary Fund (IMF) left its global growth forecast largely unchanged for this year, saying that the boom in artificial intelligence helped offset the fallout from the conflict in… <\/p>\n","protected":false},"author":1,"featured_media":11640,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[942,8665,3309,338,1006,8593,13125],"class_list":["post-11639","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-helps","tag-imf","tag-offset","tag-risks","tag-sees","tag-slowdown","tag-wardriven"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11639","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=11639"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/11639\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/11640"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=11639"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=11639"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=11639"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}