IMF Expects Global Economy to Grow by 3.1% and Inflation to Reach 4.7% in 2026

Washington, October 13 (KUNA) -- The International Monetary Fund (IMF) forecast on Tuesday that the global economy will grow by 3.1 percent in 2026, while emphasizing the need for urgent measures due to inflation, which it expects to rise to 4.7 percent in the same year. This was stated in the IMF’s “World Economic Outlook” report, which revised its growth estimate for the current year to 3.1 percent, an increase of 0.1 percentage point from previous projections, and compared with a growth rate of 3.5 percent in 2025.

The report affirmed that global economic activity “has once again proven resilient,” attributing this to “the recovery in the technology sector, available policy buffers, and adaptive capacity in mitigating damage from geopolitical disruptions.” It projected that global economic growth would slow to 3.1 percent in 2026 before rising again to 3.4 percent in 2027. Global inflation is also expected to rise noticeably this year, reaching 4.7 percent in 2026 before declining to 4.1 percent in 2027.

The report noted that energy-importing economies outside technology value chains face the most challenging economic outlooks. Regarding emerging market and developing economies, the report forecast growth to slow to 3.7 percent this year, before rebounding to 4.4 percent next year, remaining below the 4.5 percent recorded in 2025. For advanced economies, growth is expected at 2.1 percent this year, higher than last year’s 2 percent, but is projected to slow to 1.8 percent 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 highlighted that “positive factors such as strong momentum in AI-related investment and productivity gains from it, continued easing of geopolitical and trade tensions, could bolster growth.” (End) R.S.R. / M.A.A.