The International Monetary Fund has raised its 2026 global growth forecast slightly to 3.1%, but says energy disruptions, rising inflation and fiscal vulnerabilities are testing the world economy’s ability to absorb further shocks.
The October outlook, released Tuesday in Bangkok, puts growth one-tenth of a percentage point above the IMF’s July estimate, though below the 3.5% expansion recorded in 2025. The Fund says strong investment in artificial intelligence, private-sector adaptation and existing policy buffers have helped cushion the effects of geopolitical turmoil, including the Middle East conflict. It projects growth will rebound to 3.4% in 2027, while global inflation rises to 4.7% this year before easing to 4.1% next year.
That headline growth masks an uneven picture: energy-importing economies outside the technology boom face a tougher outlook, as higher fuel costs and weaker demand squeeze them. The IMF warns that escalating conflicts, renewed trade tensions, fiscal strains or a reassessment of AI-driven expectations could further weaken growth. The projections assume oil and gas shipments through the Strait of Hormuz resume by March 2027, while the Fund cautions that governments have less room to respond to another shock.
It urges policymakers to rebuild fiscal capacity and, during cost-of-living crises, favor temporary, targeted support for vulnerable households.