Global economy proving resilient, growth projected at 3.1% in 2026 – IMF
Again, the Bretton Woods institution said world trade volume growth is projected to slow in 2026 and stabilise in 2027, reflecting the drag from tariffs, adjustment in production chains, and continued strength in technology-related trade.
The International Monetary Fund has indicated that the global economy is demonstrating resilience, though the growth is uneven. In the first half of 2026, the economy performed better than anticipated, despite challenges from geopolitical tensions in the Middle East and ongoing trade disputes. The surge in technology, particularly investment in artificial intelligence, has provided a boost to demand.
The IMF projects that global growth will reach 3.1% in 2026 and 3.4% in 2027. These figures remain unchanged for 2026 and slightly revised upward for 2027, compared to the projections made in the April 2026 World Economic Outlook. Simultaneously, global headline inflation is expected to rise to 4.7% in 2026, before gradually decreasing to 4.1% by 2027. This represents a cumulative upward adjustment of 0.7 percentage points, primarily due to surges in energy and food prices.
The volume of world trade is anticipated to slow down again in 2026, with a steady growth in 2027. This slowdown is attributed to tariffs, adjustments in production networks, and the persistent strength of trade related to technology. The World Trade Volume to Slow Again report also notes that global imbalances will only marginally decrease over the medium term, as persistent fiscal deficits, limited domestic adjustments, technology-driven capital flows, and differing demand patterns among major economies continue to sustain external gaps.
The IMF has highlighted that the outlook for medium-term growth is disappointing by historical standards and largely uneven among countries. This disparity can be attributed to varying levels of AI readiness and the robustness of energy systems. The IMF underscores that the risks are largely on the downside. A prolonged stalemate in the Middle East or further escalation could maintain high energy and food prices, potentially reigniting inflation, exacerbating fiscal and external imbalances, and slowing growth.
The organization also warns that risks stemming from cyberattacks, extreme weather events, or reassessment of AI’s profitability and productivity could sharply reduce investment. Such situations may trigger equity market corrections and tighten financial conditions, impacting economies that are deeply integrated into technology supply chains and those holding technology stocks.
Written by urgent.news from Joy Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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