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The International Monetary Fund (IMF) expects global economic growth to be slightly weaker than previously estimated and warned that rising geopolitical tensions and energy disruptions are weighing on activity.
“Once again, the global economy is threatened with going off track – this time due to the outbreak of war in the Middle East at the end of February 2026,” the IMF said on Tuesday in its latest projections.
In contrast to last year which was caused by “higher trade barriers and increased uncertainty,” the IMF said – likely referring to United States President Donald Trump’s tariff policies – the current situation is being weighed down by a decline in raw material supplies due to the blockage of the crucial Strait of Hormuz and uncertainty caused by the war with Iran.
The fund revised down its forecasts for many countries, noting that its projections assume conflict remains limited and economic disruption subsides by mid-2026.
The IMF now forecasts global growth of 3.1 percent in 2026, down from a forecast of 3.3 percent in January, and 3.2 percent in 2027.
This will cause global growth to be below the long-term average.
IMF Managing Director Kristalina Georgieva has warned that even in the best-case scenario, there will be no rapid recovery to pre-war growth levels, and expansion will likely remain structurally weak.
Therefore, economic growth is likely to stabilize at this new level in the medium term, and thus be well below the average of 3.7 percent between 2000 and 2019.
The IMF chief also highlighted the short-term risks of a surge in inflation due to the war.
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Expectations for inflation in the United States and the euro zone have risen significantly.
“Fortunately, long-term expectations have not changed – this is very good and very important,” said Georgieva.
Global inflation is expected to reach 4.4 percent in 2026 and fall to 3.7 percent next year.
