IMF Projects Global Growth Stuck at 3% and Stalling Disinflation

Global Growth "Stable but Uneven" at 3% in 2026

In its World Economic Outlook Update for July 2026, the IMF maintains its global growth forecast at 3.0% for 2026 and 3.4% for 2027, figures largely unchanged from the April edition. The institution describes a two-speed recovery: energy-importing countries and the most vulnerable economies are absorbing the shock of the war in the Middle East, while those integrated into AI value chains are benefiting from a sustained investment cycle.

The Fund notably observes that global disinflation has stalled, with the decline in overall inflation being slower than anticipated due to rising energy costs and persistent pressures on service prices. The recommendations addressed to policymakers focus on continuing fiscal rebalancing, maintaining the anchoring of inflation expectations, and strengthening resilience against geopolitical and energy shocks.

These projections remain subject to significant margins of error, particularly depending on developments in the Middle East conflict, energy prices, and confidence in the AI cycle.

Fed on hold in the 3.50%–3.75% range

The minutes from the FOMC meeting on June 16-17, 2026, released on July 8 by the Federal Reserve, confirmed that the target range for the fed funds rate would remain at 3.50%–3.75%. According to Reuters, Fed officials expressed growing concerns about inflation, which is considered more persistent than anticipated, fueling the idea of a prolonged pause until the impact of the energy shock on prices becomes clear.

This monetary status quo, backed by a moderate growth scenario described by the IMF, mechanically limits the potential for re-rating of risky assets: valuation multiples have little room for expansion in an environment where real rates remain high and disinflation stalls. However, the assessment from the June meeting can evolve rapidly, as new inflation or employment data could modify the committee's view in upcoming meetings.

Brent, Strait of Hormuz, and AI Valuations: Turning Points

On the energy front, the breakdown of the ceasefire between the United States and Iran caused Brent crude to surge by 5.2% to $78.02 per barrel on July 8, with an intraday high above $80. The market's sensitivity is due to geography: approximately 20% of global crude oil and LNG flows passed through the Strait of Hormuz prior to the current conflict, according to estimates cited by Reuters and AP News. This dynamic continues the trend already described in our analysis on the Brent surge following the latest escalation in Iran.

The IMF identifies three downside risks shaping the outlook for the coming months: a renewed escalation in the Middle East conflict, intensifying trade tensions, and a sudden correction in AI-related valuations. The first mechanically benefits energy-exporting countries but weighs on importers and the costs for energy-intensive sectors. The second is already materializing in transatlantic frictions, with the U.S. presidential order aimed at suspending trade with Spain, the effective implementation and duration of which remain uncertain in light of U.S. law and the EU legal framework.

With the military situation in the Gulf remaining highly dynamic, the risk of a prolonged closure of the Strait of Hormuz and its impact on global oil supply could change rapidly in the coming days.