IMF warns depleted oil stocks leave global economy exposed to further price shocks

The IMF published its World Economic Outlook on Tuesday in Bangkok, warning that depleted emergency oil stocks and overstretched budgets leave the global economy vulnerable to further price jumps.

• The IMF revised up its 2026 global growth forecast to 3.1% from 3%, with the 2027 projection unchanged at 3.4%.
• The IMF said it modelled conditions that would push oil to US$130 a barrel if the Middle East conflict persisted through end of June 2027, keeping the straits of Hormuz and Bab el-Mandeb largely closed.
• IMF Managing Director Kristalina Georgieva urged governments to tighten fiscal policy, saying "you have the tools, now have the wisdom to use them."
• The IMF upgraded UK growth to 1.3% for 2026 but cut its 2027 forecast to 1.2%, citing higher energy prices and long-term interest rates.
• The IMF projected oil prices to average US$96 a barrel in 2026, citing Middle East conflict and shipping threats.
• The IMF projected oil prices to average US$87 a barrel in 2027, down from US$96 in 2026 and US$67.7 in 2025.
• The IMF expects the Strait of Hormuz to reopen by March 2027, with conditions returning to pre-war levels by October 2027.
• The IMF warned that escalation could cut global growth by 0.2 percentage points in 2026 and 0.5 points in 2027.
• The IMF forecast the Middle East and Central Asia region's economy to contract by 0.3% in 2026, down from the 1.9% expansion projected in April.
• IMF chief economist Silvana Tenreyro urged Chancellor John Healey to “stay the course” on repairing public finances.
• The IMF advised against broad subsidies to help households cope with high energy prices and borrowing costs.
• The IMF projected global inflation to rise from 4.1% in 2025 to 4.7% in 2026 before easing to 4.1% in 2027.