The International Monetary Fund raised its 2026 global real GDP growth forecast to 3.1 percent, up from 3.0 percent in July, and projected 3.4 percent growth for 2027. The forecasts were released on Tuesday, October 13, as leaders gathered in Bangkok for the IMF and World Bank annual meetings.
The Fund warned that risks to the outlook are tilted to the downside. Its chief economist, Silvana Tenreyro, said the global economy had been resilient but that the resilience was under strain.
Oil shock and conflict
The Fund assumes an average oil price of $96 a barrel for 2026 and $87 for 2027.
Without the measures countries took to offset the shock, the IMF estimates that 2026 global growth would be 2.5 percent. Tenreyro said a prolonged conflict could add pressure on inflation and slow growth further.
The Fund’s forecasts assume the Strait of Hormuz reopens in March 2027. Under an adverse scenario with oil at $130 a barrel through the first quarter of 2027, the outlook would weaken further.
Regional downgrades
The IMF said 47 percent of economies have been downgraded since its April forecasts. Saudi Arabia is now expected to contract 3.3 percent in 2026, after growing a predicted 1.7 percent in July.
Iran is forecast to shrink 7.6 percent, Iraq 16 percent, Kuwait 16.7 percent, Qatar 15.6 percent and the United Arab Emirates 3.9 percent in 2026.
Growth and inflation outlook
The US is forecast to grow 2.3 percent in both 2026 and 2027. The euro zone’s 2026 forecast was upgraded to 1.1 percent from 0.9 percent, and Britain’s to 1.3 percent.
China is projected to grow 4.5 percent in 2026 and 4.0 percent in 2027, while India is forecast at 7.0 percent for both years. Global headline inflation is seen at 4.7 percent in 2026 and 4.1 percent in 2027, rising to 5.2 percent in 2027 under the adverse oil scenario.
The IMF attributed much of the upgrade to AI infrastructure investment, particularly in countries supplying AI hardware. It warned that elevated public debt, especially in advanced economies, raises the risk of sharply higher borrowing costs.
Related: World Bank lifts Indonesia 2026 growth view to 5.2% · Hungary budget council flags risks to 2.0 percent growth forecast
Source: IMF
