The International Monetary Fund (IMF) says the global economy remains on track to grow by about 3% in 2026, despite the economic pressure caused by the ongoing war in the Middle East and higher energy prices.
IMF spokesperson Julie Kozack said the global economy had shown more resilience than expected during the past six months of conflict. Some countries have responded to the energy shock by using oil and gas reserves, finding alternative energy sources and reducing demand.
However, the IMF warned that the risks to the global economy remain high. Oil and gas prices are still elevated, while the improvement in inflation has stalled. Rising energy costs are also pushing up the prices of fertilisers, food and other commodities.
The IMF’s current 3% growth projection is lower than the average global growth of about 3.5% recorded in 2024 and 2025. The Fund is expected to release an updated global economic forecast during its annual meetings with the World Bank in Bangkok from October 12 to 18.
Another major concern is global public debt, which is now close to 100% of global GDP. The IMF said debt levels are particularly high in many advanced economies, while some developing countries are facing liquidity challenges because of reduced financial assistance.
The IMF also pointed to the rapid growth of artificial intelligence technology as a positive force for the global economy. While higher energy costs are creating a negative supply shock, investment and demand linked to AI are providing some support for economic activity.
The Fund urged governments to maintain price stability, develop clear plans to reduce budget deficits and debt, and introduce reforms that can improve long-term economic growth.
For developing economies, including countries in Africa, the IMF said stronger reforms and the removal of barriers to investment and business activity will be important for improving growth prospects.
