IMF forecasts global real GDP growth of 3.1% in 2026
The International Monetary Fund (IMF) raised its 2026 global growth forecast to 3.1% from 3.0% in July, with strong AI investment offsetting the energy shock from the Middle East war. However, 2027 growth remained unchanged at 3.4%.
The International Monetary Fund (IMF) has raised its global growth forecast for 2026 to 3.1% from 3.0% in July, with strong investment in artificial intelligence (AI) helping to offset the energy shock caused by the conflict in the Middle East. However, growth is expected to remain unchanged at 3.4% in 2027. China's growth is forecast at 4.5% for 2026 and 4.0% for 2027, both down 0.1 percentage point from the July forecasts.
India's growth is expected to be 7.0% for both 2026 and 2027, up from the July forecasts of 6.4% and 6.7%, respectively. The IMF also projects global headline inflation to increase to 4.7% in 2026, easing to 4.1% in 2027, matching the inflation level of 2025. The organization assumes the Strait of Hormuz will reopen in March 2027, with conditions returning to pre-war levels by October 2027.
The IMF scenario of a worsened Middle East war, with oil prices at $130 per barrel through Q1 2027, would reduce global growth by 0.2 percentage point in 2026 and 0.5 percentage point in 2027. An unwinding of AI investment and sharply lower asset prices could reduce global GDP output by 1.1% by 2028.
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- AI investment propping up global growth: IMF economictimes.indiatimes.com
