Global growth remains on course to reach about 3% in 2026 despite the economic shock caused by the war in the Middle East, the International Monetary Fund has said, while warning that the outlook remains vulnerable to energy prices, debt pressures and persistent inflation risks.
Julie Kozack, the IMF’s communications director, said the world economy had proved more resilient than expected since the conflict began. But she cautioned that the disruption to oil and gas supplies was not over and that the recovery in global disinflation had stalled.
Energy prices remain elevated, placing renewed pressure on households, businesses and governments. The IMF also said global inflation expectations had risen, although longer-term expectations remained broadly anchored.
Energy shock continues to cloud IMF outlook
The latest assessment follows the IMF’s July World Economic Outlook update, which projected global growth of 3% in 2026 before an improvement to 3.4% in 2027. The fund said the impact of the conflict had been uneven, with energy importers and more vulnerable economies facing the greatest strain.
Technology investment, including demand linked to artificial intelligence, has helped offset some of the damage from the war and higher commodity prices. However, the IMF has warned that the support from the technology cycle may weaken, while geopolitical and financial uncertainty is likely to remain high.
Ms Kozack said mounting global debt was adding to the risks facing policymakers. Higher borrowing costs and limited fiscal room could make it harder for governments to shield consumers and companies from further energy or food price increases.
The IMF’s forecast assumes that the global economy can continue to absorb the energy shock without a prolonged escalation in supply disruption. A worsening conflict, renewed volatility in oil and gas markets or a broader rise in inflation expectations could weaken growth further.
The fund said policymakers should remain focused on restoring price stability and rebuilding financial buffers, even as they respond to the immediate economic consequences of the conflict.
