The IMF said AI-driven economies could come out ahead in its July outlook, while others hit by rising oil prices and inflation face pressure. WASHINGTON, July 8, 2026, 10:04 EDT
- IMF now sees global growth at 3.0% for 2026 and 3.4% for 2027, and raised its 2026 headline inflation forecast to 4.7%.
- Baseline scenario has the Strait of Hormuz beginning to reopen by mid-July and getting back to prewar conditions by March 2027, the IMF said.
- Brent crude surged over 5% to $78 on Wednesday, while the U.S. 10-year Treasury yield moved up to 4.58%, putting the IMF’s outlook for oil prices to the test.
The IMF’s July forecast points to a mixed outlook for investors. AI demand and oil stocks have helped limit the Middle East shock, but inflation is stuck higher, and central banks may not be able to cut rates much. The fund said global disinflation hasn’t made progress and risks are still to the downside, with conflict and financial market swings still possible.
Headline figures hold steady when looking globally. 2026 growth is 0.1 point lower from April, while 2027 is 0.2 point higher. World trade is seen slowing to 3.5% in 2026 after 5.0% in 2025, but that 2026 number is still 0.7 point higher than the April outlook. The data suggest the boost comes from trade rerouting and tech shipments, not rising overall demand.
| IMF measure | 2025 | 2026 forecast | 2027 forecast | 2026 revision vs April |
|---|---|---|---|---|
| World output | 3.5% | 3.0% | 3.4% | -0.1 pt |
| World trade volume | 5.0% | 3.5% | 4.3% | +0.7 pt |
| Oil prices | -14.4% | +31.8% | -11.8% | +10.4 pt |
| World consumer prices | 4.1% | 4.7% | 3.9% | +0.3 pt |
The table shows the oil shock has had a bigger effect on inflation than on growth. World growth is forecast at 3.0%, which isn’t a recession signal. Oil is up 31.8% and inflation comes in at 4.7%, so duration risk stays high.
All eyes remain on Hormuz. The IMF is assuming the reopening happens in mid-July and things are back to normal by March 2027. For 2026, the IMF is using an average oil price of $89.27 a barrel, with the June 10 futures in view. AP reported via the Independent that the Strait handles about 20% of the world’s crude and gas. Reuters said Brent jumped more than 5% to $78 after President Trump declared the Iran memo “over”; European stocks slid 1.6% and the VIX was up almost 13%. IMF
Deniz Igan, who heads the IMF Research Department’s World Economic Studies division, told Reuters, “A renewed conflict in the region is going to catch the global economy in a worse position.” Countries have already drawn down their reserves and don’t have much left to use, she said. Reuters
The market is focused on country breakdowns now. IMF projections point to a premium for AI hardware, while energy importers are still getting hit.
| Economy or region | 2026 growth forecast | Revision vs April | 2027 growth forecast | Investor read |
|---|---|---|---|---|
| United States | 2.3% | 0.0 pt | 2.2% | Energy, AI balance out |
| Euro area | 0.9% | -0.2 pt | 1.2% | Importer pain on energy |
| Korea | 2.6% | +0.7 pt | 2.5% | AI hardware exports boost |
| China | 4.6% | +0.2 pt | 4.1% | Tech exports buffer oil hit |
| India | 6.4% | -0.1 pt | 6.7% | Strong growth, oil weighs |
| Middle East and Central Asia | 0.7% | -1.2 pt | 6.5% | War disruption |
| Saudi Arabia | 1.7% | -1.4 pt | 5.5% | Energy risk from conflict |
The U.S. is set to outpace the euro area by 1.4 percentage points in growth for 2026. South Korea picked up a 0.7-point upgrade, which is big compared to the global 0.1-point cut. For portfolios, that’s more about choosing sectors and countries, not a case for risk-on.
IMF staff see a clear AI offset. The top four net exporters of AI hardware—Korea, Malaysia, Taiwan Province of China and Thailand—saw an average first-quarter growth surprise of 4.4 points. The rest of the world posted a negative surprise of 0.3 points. Korea reported 7.5% growth, more than four times above the April forecast. China grew at 8.1%, mainly due to public infrastructure and jumping high-tech manufacturing and exports.
Semiconductor orders now make up a chunk of the global outlook. That’s boosting earnings estimates for markets linked to AI hardware. But the margin for safety is thinner. The IMF has warned that if AI profit hopes get cut, tech spending could drop and that could hit consumption as well. Cross-border flows could spread the impact, the IMF said.
Equity moves line up with those warnings. Samsung Electronics KRX:005930 dropped for a second day after the company reported profit up 19 times. Reuters noted investors are looking at memory-chip demand and valuations now that some AI bottlenecks have eased. Marieke Blom, ING AMS:INGA chief economist and global research head, said higher capex compared to EBITDA might “pressure valuations” in parts of the AI supply chain. Reuters
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