The International Monetary Fund (IMF) has projected that global economic growth will slow to 3.0 percent in 2026 before recovering to 3.4 percent in 2027, citing the impact of the conflict in the Middle East and continued geopolitical uncertainty.
In its latest economic outlook released on Wednesday, the IMF said the 2026 growth forecast is lower than the average global growth of 3.5 percent recorded in 2025 and slightly below the 3.1 percent projection published in its April 2026 World Economic Outlook.
The IMF said the expected slowdown is largely due to the economic effects of the Middle East conflict, although stronger demand for artificial intelligence (AI) technologies is expected to partly cushion the impact.
According to the report, advances in AI and the rapid adoption of new technologies are helping support global economic activity despite growing geopolitical and economic challenges.
The IMF also warned that global inflation is expected to rise before easing. Headline inflation is projected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before falling to 3.9 percent in 2027.
The increase is expected to be driven by higher energy prices, tighter monetary policies and continued global uncertainty.
The report further projects that global trade will slow significantly. Growth in world trade volumes is expected to decline from 5.0 percent in 2025 to 3.5 percent in 2026 before improving to 4.3 percent in 2027.
Among advanced economies, economic growth is forecast at 1.7 percent in 2026 and 1.8 percent in 2027.
The United States economy is expected to grow by 2.3 percent in 2026 and 2.2 percent in 2027, with the forecasts largely unchanged from the IMF’s April outlook.
The euro area is projected to expand by 0.9 percent in 2026 and 1.2 percent in 2027, while the United Kingdom’s economy is expected to grow by 1.0 percent in 2026 before improving to 1.3 percent in 2027 as the impact of high energy prices eases.
The IMF said emerging markets and developing economies are expected to record slower growth of 3.8 percent in 2026 before recovering to 4.5 percent in 2027.
China remains one of the strongest-performing major economies, with growth projected at 4.6 percent in 2026. This is 0.2 percentage points higher than the IMF’s April forecast.
In the Middle East and Central Asia, economic growth is expected to slow sharply to 0.7 percent in 2026 before rebounding to 6.5 percent in 2027 as economic conditions improve.
Despite the projected recovery in 2027, the IMF warned that significant risks remain.
The fund said renewed conflict in the Middle East, increasing trade restrictions between countries and possible setbacks in the technology sector could weaken global economic growth further.
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