IMF Raises 2026 Global Growth Forecast to 3.1%
Bangkok (ANTARA) — The International Monetary Fund (IMF) on Tuesday (13 October) marginally raised its forecast for global growth in 2026 to 3.1%, up 0.1 percentage points from its July projection. The increase is driven by a surge in investment in artificial intelligence (AI), which is supporting growth in some economies and offsetting the impact of the conflict in the Middle East on others.
According to Xinhua, citing the latest World Economic Outlook report, titled “Resilience Under Strain, Urgent Choices”, the IMF forecasts that global growth will slow from 3.5% in 2025 to 3.1% in 2026, before rising to 3.4% in 2027. The 2027 figure is unchanged from the July forecast and 0.2 percentage points higher than the April projection.
The IMF said growth is becoming increasingly concentrated. Thirty-two economies now account for 95% of global growth, down from 54 economies in April. Meanwhile, growth forecasts for around 47% of economies have been revised downwards.
The IMF said the global economy is not simply slowing or accelerating; rather, growth is shifting according to countries’ exposure to energy shocks caused by the war and to AI-related demand.
The strongest-performing economies have limited vulnerability to energy-market turmoil and strong links to AI hardware supply chains. By contrast, energy-importing countries with limited links to technological developments, including many low-income countries, face the greatest pressure from higher import costs, weaker currencies and falling real incomes.
The IMF’s baseline scenario assumes the Strait of Hormuz will reopen in March 2027, with conditions generally returning to pre-war levels by October 2027. Before the war, around 25% of the world’s seaborne oil trade passed through the Strait of Hormuz.
The IMF estimates that the closure of the Strait of Hormuz would reduce global economic growth by 0.9 percentage points this year if there were no offsetting supply responses. However, the rerouting of oil shipments from the Gulf, increased production elsewhere, the use of oil reserves and declining oil intensity in the global economy are expected to limit the net impact to around 0.3 percentage points.
The IMF cut its 2026 growth forecast for Saudi Arabia by 5 percentage points from its July estimate, projecting a 3.3% contraction. Bahrain, Iraq, Kuwait and Qatar, commodity-producing countries particularly affected by disruptions to energy output and distribution, are expected to suffer double-digit economic contractions this year.
The IMF warned that oil inventories are continuing to dwindle towards critically low levels, risking a sharp price surge. Oil is forecast to average US$95.74 per barrel in 2026—around 41% higher than in 2025—before falling to US$87.39 per barrel in 2027.
Headline global inflation is now forecast to rise from 4.1% in 2025 to 4.7% in 2026, before falling back to 4.1% in 2027.
Compared with its April forecast, the IMF raised its inflation projections by 0.3 percentage points for 2026 and 0.4 percentage points for 2027.
Core inflation is not expected to return to 2% until the end of 2027 in Japan and the UK, and until mid-2028 in the euro area and the United States.
Among major economies, US growth is forecast at 2.3% in both 2026 and 2027, supported by consumption, fiscal policy and technology investment. The euro area is expected to grow by 1.1% in 2026 and 1.2% in 2027, reflecting continued pressure from high energy prices and weak consumer confidence.
India’s growth is projected at 7.0% in both 2026 and 2027. Japan is forecast to grow by 0.7% and the UK by 1.3% in 2026.