Trump’s Devastating Impact on World Economy Revealed
President Donald Trump suffered a fresh blow Wednesday as the International Monetary Fund cut its 2026 growth forecast and warned of rising inflation.
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The IMF said global output is expected to fall to 3 percent in 2026, down from 3.5 percent last year and slightly below its April projection of 3.1 percent. It also raised its 2026 global inflation forecast to 4.7 percent, up from 4.1 percent in 2025, due to higher commodity prices.
The report comes as Trump, 80, scrambles to restore confidence in his administration amid voters’ increasingly bleak assessment of the economy ahead of the November midterm elections. The president faces mounting criticism over the economic fallout from the conflict with Iran, which he started in February, and is trying to bring to an end over fears it could cause a global “economic catastrophe.”
The report was finalized before a fuming Trump declared a ceasefire between the U.S. and Iran “over” while speaking at a NATO summit in Ankara, Turkey.
Trump said he didn’t want to negotiate with Iran any longer because they are “scum” after Tehran struck three oil tankers in the Strait of Hormuz, and U.S. military sites in Bahrain and Kuwait.
The IMF warned that while the global economy had performed better than expected so far, the threat of renewed fighting “looms large.”
In its report, the IMF said “the most imminent risk” to the global economy ”stems from developments in the Middle East.”
“Re-escalation of geopolitical tensions would hurt growth and compound inflationary pressures.”
The war has disrupted shipping through the Strait of Hormuz, through which roughly one-fifth of the world’s oil supply normally passes, sending fuel prices soaring.
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The fund projected growth would rebound to 3.4 percent in 2027, although that would remain below the 3.5 percent average recorded in 2024 and 2025. It also forecast global trade growth would slow to 3.5 percent in 2026, down from 5 percent in 2025, before rebounding to 4.3 percent in 2027.
The IMF’s projections assumed the Strait of Hormuz would begin reopening in mid-July and return to prewar conditions by March 2027.
Americans have continued to grapple with rising living costs despite Trump’s repeated claims that his economic agenda is working.
Trump previously acknowledged the economic risks posed by the Iran war, telling reporters at the G7 summit in France in June that it “could have caused an international depression.”
“I didn’t want to see economic catastrophe. If you kept this going, that could have happened,” Trump said.
“The one president I did not want to be was the late, great Herbert Hoover,” Trump went on, referring to the U.S president widely blamed for the Great Depression following the 1929 stock market crash.
He added that without a deal, the market “would go down at levels that nobody ever saw before, maybe except for 1929.”
Previously contacted by the Daily Beast for comment on economic concerns, White House spokesman Kush Desai said in a statement: “President Trump has always been clear about the fact that oil and gas prices—and thus overall inflation—will rapidly drop as soon as the Iran situation is resolved.”
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The Daily Beast has contacted the White House for additional comment.
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