The International Monetary Fund (IMF) has projected global economic growth of 3.1 per cent in 2026, warning that persistent geopolitical tensions, rising energy prices and trade disruptions continue to threaten the world’s economic recovery.
In its October 2026 World Economic Outlook report, titled Resilience Under Strain, Urgent Choices, the IMF said the global economy had remained resilient despite the ongoing conflict in the Middle East and growing trade tensions.
The Fund projects global growth to improve to 3.4 per cent in 2027, while global headline inflation is expected to rise to 4.7 per cent in 2026 before easing to 4.1 per cent the following year.
The report attributes the economy’s resilience partly to increased investment in artificial intelligence (AI), flexible energy supplies, improved energy efficiency and businesses adapting to disruptions in international trade.
However, the IMF cautioned that the recovery remains uneven, with countries facing different economic outcomes depending on their exposure to energy price shocks and their ability to benefit from technology-related investments.
The IMF warned that a prolonged conflict in the Middle East could keep energy and food prices elevated, revive inflationary pressures and weaken economic growth.
Disruptions to energy infrastructure, cyberattacks and extreme weather events could further intensify the economic impact, particularly for countries that depend heavily on imported energy and food.
The Fund also cautioned that a sudden decline in investment linked to artificial intelligence could weaken business activity, trigger stock market corrections and tighten financial conditions globally.
Global trade growth is projected to slow from 5.0 per cent in 2025 to 4.6 per cent in 2026 before edging up to 4.7 per cent in 2027, reflecting the effects of tariffs and adjustments in international production chains.
For Sub-Saharan Africa, the IMF projects economic growth of 4.5 per cent in both 2026 and 2027, according to the report’s regional forecasts.
Despite the projected expansion, the Fund warned that low-income and vulnerable economies face significant risks from higher import costs, exchange-rate pressures and weaker household purchasing power.
Countries with limited participation in technology supply chains and heavy dependence on imported energy are particularly exposed to the combined effects of geopolitical instability and rising commodity prices.
The IMF noted that higher food prices could worsen poverty and food insecurity, especially where transport disruptions, expensive fertilisers and extreme weather affect food supplies.
The Fund urged governments to rebuild financial reserves and adopt credible fiscal adjustment plans as public debt and borrowing costs remain elevated in many economies.
It recommended that government assistance to households affected by higher energy and food prices should be temporary and targeted at the most vulnerable, while avoiding measures that undermine long-term fiscal sustainability.
The IMF also called on central banks to maintain their focus on price stability, with monetary policy decisions tailored to individual countries’ inflation levels and economic conditions.
It further emphasised the need for countries to diversify energy sources, strengthen essential supply chains, improve preparedness for artificial intelligence and maintain international trade cooperation.
The Fund said international cooperation would remain critical in managing cross-border economic shocks and ensuring that technological advances translate into broader and more inclusive growth.
