The International Monetary Fund on October 13 raised its 2026 global growth forecast to 3.1% but warned that war, trade tensions, inflation and uncertainty over artificial intelligence are steadily reducing policymakers’ room to respond.
The projection, included in the IMF’s October World Economic Outlook, is up from the 3.0% forecast issued in July but below the 3.5% growth recorded in 2025. Global headline inflation is expected to reach 4.7% this year before easing to 4.1% in 2027, with higher energy and food costs adding to price pressures. The IMF said strong investment in AI infrastructure has helped offset some of the economic damage from the continuing Middle East conflict and elevated energy prices.
It also projected global growth of 3.4% in 2027, unchanged from its July estimate. However, the recovery is becoming increasingly uneven, benefiting countries tied to technology supply chains while leaving many energy-importing and lower-income economies under greater strain. The fund warned that a prolonged or wider conflict, renewed trade disputes, higher government borrowing costs or a sharp reversal in AI investment could weaken growth substantially.
IMF officials urged governments to rebuild fiscal buffers, strengthen energy security and preserve open trade while targeting assistance to households facing higher living costs.