IMF Lowers China's 2026 Growth Forecast To 4.4% As Iran War Disrupts Global Economy

Last Updated:April 14, 2026, 19:29 IST

The latest projection is slightly below its January estimate of 4.5 percent and well under China’s official five percent growth recorded last year.

The International Monetary Fund (IMF) on Tuesday lowered China’s growth forecast for 2026 to 4.4 percent, citing global economic disruption caused by the ongoing war in Iran. The revision comes despite easing US tariffs on Chinese goods and domestic stimulus measures aimed at softening external shocks.

The latest projection, published in the IMF’s World Economic Outlook during its spring meetings in Washington, is slightly below its January estimate of 4.5 percent and well under China’s official five percent growth recorded last year.

The Washington-based lender said lower US effective tariff rates on Chinese exports, along with stimulus policies, had helped offset some of the negative impact triggered by the Middle East conflict. It added that exports, a key driver of China’s economy, remained relatively strong.

ALSO READ: IMF Raises India FY27 Growth Forecast To 6.5%, Flags Inflation Risk From West Asia Wa

However, the IMF warned that China’s broader economic outlook continues to weaken. It expects growth to slow further to 4.0 percent by 2027 due to “structural headwinds" including a prolonged slowdown in the housing sector, a shrinking labour force, falling returns on investment, and weaker productivity growth.

The report also highlighted broader regional and global spillovers from the conflict. Emerging and developing Asia is now expected to grow by 4.9 percent in 2026, down from 5.0 percent, while global growth has been trimmed to 3.1 percent, a 0.2 percentage point downgrade.

The IMF said disruptions in the Middle East are expected to hit tourism and remittance flows in parts of South and Southeast Asia, weakening domestic demand. The Philippines saw its growth outlook cut by 1.5 percentage points.

India, however, was a relative bright spot, with growth upgraded to 6.5 percent for 2026 after US tariff reductions from 50 percent to 10 percent helped cushion external pressures.

IMF chief economist Pierre-Olivier Gourinchas said global growth could have been upgraded to 3.4 percent next year if not for the conflict. He warned that war-driven volatility in energy markets was a key risk to the outlook.

Prices of oil, gas and fertilizers have surged due to the conflict, as Iran virtually blocked traffic through the Strait of Hormuz, a key waterway for shipments.

(With inputs from AFP)

News world IMF Lowers China's 2026 Growth Forecast To 4.4% As Iran War Disrupts Global Economy

Read More