Your Daily Global Economy Briefing

Global Economy Navigates Crosscurrents of War and Technology Amid Stalled Disinflation

• The International Monetary Fund (IMF) projects global growth at 3.0% for 2026, broadly unchanged from its April forecast, but highlights an uneven outlook shaped by two opposing forces: the lingering impact of the Middle East conflict and an accelerating, AI-driven technology cycle. While war shocks weigh on energy importers, demand for AI-related technology is boosting economies integrated into the global technology value chain.

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• Global disinflation has stalled, with headline inflation now projected to rise to 4.7% in 2026, an upward revision from April, primarily driven by higher energy and food prices stemming from the Middle East conflict. Notably, the International Energy Agency (IEA) anticipates global oil demand will decline by 1 million barrels per day in 2026, marking the first such drop since 2020, due to elevated prices and disruptions to physical supply, particularly impacting Asia.

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• The Middle East conflict continues to exert significant pressure, with renewed strikes and conflicting reports on the status of the Strait of Hormuz causing oil prices to jump by 3-5% on Monday, July 13. The IMF's forecast for 2026 assumes the Strait of Hormuz will begin to reopen in mid-July and return to pre-war conditions by March 2027, a critical assumption given the waterway's importance for global energy shipments.

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