The International Monetary Fund has trimmed its forecast for global economic growth in 2026 to about 3%, down from 3.5% a year earlier, citing disruption to energy supplies from the Iran conflict and stubbornly elevated inflation.

The fund now expects consumer prices to rise roughly 4.7% this year, reflecting higher commodity costs and fragmented supply chains. The revision marks a sober reassessment of a recovery that had appeared to be on steadier footing earlier in the year.

The Iran conflict has pushed oil and shipping costs higher, injecting a fresh inflationary variable just as central banks weigh their next steps. Even modest supply disruptions can cascade through transport, manufacturing and food prices, the fund warned.

The downgrade widens the gap between advanced economies, where services remain resilient, and emerging markets, which face tighter financing and pricier imports. Lower-income nations are most exposed to energy shocks and currency pressure.

Policymakers are left walking a narrow path: taming inflation without smothering growth already constrained by debt and uncertainty. The IMF urged coordinated action on energy security and a careful calibration of monetary and fiscal support.

The outlook hinges on whether the geopolitical shock proves transient. For now the fund's message is that the global economy is growing, but more slowly and more precariously than it was a few months ago.

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