The International Monetary Fund has raised its forecast for global growth in 2026 to 3. 1%, from 3% in July, but warned that the buffers protecting economies from further shocks are rapidly weakening. Growth is projected to reach 3. 4% in 2027, although that outlook assumes oil and gas shipments through the Strait of Hormuz resume by March and shipping conditions return to normal by October 2027.
The IMF said the global economy had absorbed much of the damage from the Middle East conflict because Gulf producers rerouted supplies and governments released strategic reserves. Those measures helped prevent a larger oil shock, but inventories are being depleted while high public debt and borrowing costs have reduced governments’ ability to cushion households and businesses against another surge in energy prices.
It also warned that damage to energy infrastructure, cyberattacks and extreme weather could intensify disruptions and push up food and energy costs.
Global inflation is expected to average 4. 7% this year before easing to 4. 1% in 2027. The IMF urged central banks to respond to temporary price increases cautiously but to act quickly if inflation expectations become embedded. It also called for governments to rebuild fiscal space and keep any support for households facing higher food and energy bills temporary and targeted.
Artificial-intelligence investment is currently offsetting part of the energy shock, but the IMF identified a sharp reversal in the technology boom as another major threat. A loss of confidence in AI productivity or profitability could trigger falling asset prices, weaker demand and lower trade.
The benefits of the AI boom are concentrated unevenly. The United States and China account for more than three-quarters of net demand for AI-related equipment, while 32 countries now account for 95% of global growth, down from 54 countries in April. Emerging and developing economies exposed to higher oil and gas prices are expected to grow 3. 7% in 2026, down from 4. 5% in 2025, before recovering to 4. 4% in 2027.
The IMF also pointed to rising bond yields, elevated debt and renewed trade tensions as pressures that could further narrow policymakers’ room to respond. Its warning leaves the outlook dependent on an easing of the energy disruption and a gradual moderation of AI demand, while emphasizing that resilience so far should not be treated as permanent.