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Global Economy · 8 July 2026

IMF cuts global growth to 3% as war inflation stalls disinflation worldwide

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Slower global growth dampens demand for Australian exports — iron ore, coal, LNG — but Australia is partially insulated as an energy exporter that benefits from higher commodity prices.

In a nutshell: The IMF’s July 2026 World Economic Outlook update projected global growth of 3.0% in 2026, down from pre-war forecasts. Global headline inflation was revised up to 4.7% for the year. The IMF noted the disinflation trend in place since early 2024 has stalled. Downside risks include prolonged Hormuz closure, further geopolitical fragmentation and weak AI productivity gains. Europe faces potential stagflation, with Germany and Italy at risk of technical recession.

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What they’re saying

IMF emphasises V-shaped recovery is still the base case; critics note the optimism depends on the war remaining contained.
The rebound forecast requires a swift end to Hormuz disruptions — something neither side appears close to delivering.

IMF WEO press briefing transcript published 8 July on imf.org. Official source; high confidence.

Press Briefing Transcript: World Economic Outlook (WEO) Update, July 8, 2026 World Economic Outlook, April 2026: Global Economy in the Shadow of War
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Diversified international equity exposure may face headwinds from European slowdown; Australian energy and resources are relative beneficiaries.

Useful context for anyone thinking about investments, jobs or business planning over the next 12 months.

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