IMF: Global economy to grow by 3.1% and inflation to reach 4.7% in 2026

The International Monetary Fund (IMF) forecast on Tuesday that the global economy will grow by 3.1% in 2026, while simultaneously emphasizing the need for urgent action due to inflation, which it expects to rise to 4.7% in the same year.

This comes in the IMF’s “World Economic Outlook” report, which revised its growth estimate for the current year to 3.1%, an increase of 0.1 percentage point from previous projections, compared with a growth rate of 3.5% in 2025.

The report affirmed that global economic activity “has shown resilience again,” attributing this to “the recovery in the technology sector, available policy buffers, and the capacity to mitigate damage from geopolitical disruptions.”

It projected that global economic growth would slow to 3.1% in 2026 before picking up again to 3.4% in 2027.

Global inflation is also expected to rise noticeably this year, reaching 4.7% in 2026 before declining to 4.1% in 2027.

Regarding emerging market and developing economies, the report forecast their growth rate to slow to 3.7% this year, rising to 4.4% next year, which would still remain below the 4.5% recorded in 2025.

For advanced economies, the report projected growth of 2.1% this year, higher than last year’s 2%, but anticipated a slowdown to 1.8% next year.

The report warned that “the policy buffers that have underpinned this resilience are not unlimited,” adding that “risks lean to the downside, as escalating conflicts, reassessments of artificial intelligence expectations, renewed trade tensions, or weaknesses in public finances could weaken growth.”

Conversely, it noted that “positive factors such as strong momentum in AI-related investment, productivity gains from AI, or continued easing of geopolitical and trade tensions could bolster growth.”