IMF global growth outlook remains resilient, with the fund projecting steady expansion through 2027 despite trade tensions and geopolitical risks

The International Monetary Fund, led by Managing Director Kristalina Georgieva, said on Monday that global economic growth is expected to remain resilient over the next two years, projecting expansion of 3.3 per cent in 2026 and 3.2 per cent in 2027.

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The forecast was published in the IMF’s January update of the World Economic Outlook and represents a modest upward revision for 2026 compared with the October 2025 assessment, while the outlook for 2027 was left unchanged.

Despite uneven performance across regions, the fund said global momentum is being sustained as negative and positive forces broadly offset each other, allowing growth to continue at a steady pace.

The IMF global growth outlook identified rising trade tensions and shifting trade policies as significant headwinds.

These pressures, however, are being counterbalanced by robust investment in technology, particularly artificial intelligence, which is lifting growth prospects more strongly in North America and parts of Asia.

Supportive financial conditions and generally accommodative monetary policy were also cited as key stabilising factors, alongside what the IMF described as the private sector’s remarkable adaptability in the face of uncertainty.

Global inflation is expected to continue easing, falling from an estimated 4.1 per cent in 2025 to 3.8 per cent in 2026 and 3.4 per cent in 2027.

The fund noted that inflation is likely to return to target more slowly in the United States than in other major economies due to persistent domestic price pressures.

Among advanced economies, growth is forecast at 1.8 per cent in 2026 before easing slightly to 1.7 per cent in 2027.

Emerging markets and developing economies are projected to grow just above 4 per cent in both years.

In the Middle East and Central Asia, growth is expected to strengthen to 3.9 per cent in 2026 and 4.0 per cent in 2027, supported by higher oil output, firm domestic demand and ongoing economic reforms.

Sub-Saharan Africa is also set for a gradual improvement, with growth rising to 4.6 per cent in both 2026 and 2027, underpinned by macroeconomic stabilisation efforts in several large economies.

Nigeria’s economy is forecast to expand by 4.4 per cent in 2026 before moderating to 4.1 per cent in 2027.

Latin America and the Caribbean are expected to see growth slow to 2.2 per cent in 2026 before rebounding to 2.7 per cent in 2027 as cyclical conditions normalise.

Emerging and developing Europe is projected to recover from a sharp slowdown, with growth of 2.3 per cent in 2026 and 2.4 per cent in 2027.

The IMF cautioned that risks to the outlook remain tilted to the downside, citing the possibility of escalating geopolitical tensions and the risk that expectations around technology investment could weaken.

At the same time, the fund pointed to potential upside if artificial intelligence adoption delivers stronger productivity gains and renewed business dynamism, describing the technology as a powerful force that could support durable growth.

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To safeguard stability, the IMF urged governments to rebuild fiscal buffers, maintain price and financial stability, reduce policy uncertainty and press ahead with structural reforms without delay.