IMF predicts 3.1% global growth in 2026 amid economic challenges

The International Monetary Fund said on Tuesday that it expects global growth to be 3.1 percent in 2026 and 3.4 percent in 2027. These numbers are the same for 2026 and slightly higher for 2027 compared to the April 2026 World Economic Outlook.

These forecasts are in the IMF’s 2026 World Economic Outlook report called "Resilience Under Strain, Urgent Choices." The report was presented during the IMF and World Bank meetings happening in Bangkok, Thailand.

According to the report, global inflation is expected to rise to 4.7 percent in 2026 before dropping to 4.1 percent in 2027. This marks an overall increase of 0.7 percentage points, mainly due to rising energy and food prices.

The report stated, "The global economy is again proving resilient, but unevenly so and with rapidly narrowing margins of adjustment in the near term."

It continued, "Activity in the first half of 2026 held up better than expected despite the ongoing war in the Middle East and ongoing trade tensions. The technology cycle has provided a demand boost, led by strong investment in artificial intelligence (AI). The mix of these factors, geopolitics and technology, has created a split global economy. Some countries benefit from favorable trade terms or tech-related exports and investment, while others struggle with higher import costs and weaker demand. Buffers and adaptability have helped many economies deal with negative shocks so far."

The IMF noted that flexible supply responses, changing shipment routes, drawing down inventories, fiscal support, and lower energy use than in past decades have helped lessen the impact of the war on economic activity.

The report added that private companies have continued to adapt to various shocks, including geopolitical risks and changes in trade policies. At the same time, financial markets have largely remained optimistic about these challenges, supported by enthusiasm in the technology sector.

But the report warned that these adjustments cannot go on forever. It noted that inventories are being depleted, commodity markets are at risk, and ongoing fragmentation could hurt efficiency. Prolonged uncertainty could also eventually impact confidence.

The report concluded that energy shortages could limit the momentum driven by AI, and funding conditions might change quickly for various reasons, including concerns about fiscal sustainability.