The IMF has left its 2026 global economic growth forecast largely unchanged at 3pc but the outlook remains highly dependent on the status of hostilities in the Middle East.
The IMF's updated World Economic Outlook, released on Wednesday, projects growth at 3pc this year and 3.4pc in 2027, a "V-shaped recovery" that reflected the economists' assumptions that energy exports through the strait of Hormuz would begin to normalize this month and fully recover by March 2027.
"The world economy has weathered the shock from the war better than feared, with limited evidence of second-round effects," IMF deputy head of research Petya Koeva Brooks said.
The forecast reflects economic conditions as of late June.
The IMF in April expected global growth at 3.1pc in 2026 and 3.2pc in 2027.
But the release of the latest IMF outlook coincided with another flare-up in the conflict between the US and Iran. The two militaries exchanged fire overnight on Wednesday, following Iranian attacks on three vessels attempting transit through Hormuz. President Donald Trump on Wednesday said the interim deal his administration signed with Iran in June "is over". Tehran also pronounced the deal "dead".
