In its latest World Economic Outlook, the International Monetary Fund projects global growth of 3.1 percent in 2026 and 3.4 percent in 2027, leaving the 2026 forecast unchanged and raising the 2027 projection by 0.2 percentage point from April. Global headline inflation is expected to rise to 4.7 percent in 2026 before easing to 4.1 percent in 2027, a cumulative upward revision of 0.7 percentage point. Resilience reflects flexible energy supply, inventory drawdowns and artificial intelligence investment, but gains are concentrated in technology-linked economies and energy exporters, while energy importers outside technology value chains face higher costs, weaker demand and tighter fiscal constraints. Risks remain tilted downward as adjustment buffers diminish. A prolonged or escalating Middle East conflict could sustain commodity price pressures, while a reassessment of AI profitability could curb investment, trigger equity corrections and tighten financial conditions. The IMF calls for credible fiscal adjustment, temporary and targeted support for vulnerable households, and monetary policy tailored to inflation conditions and exposure to energy and technology shocks. Its analysis finds that matching targeted income support through price-suppressing measures can require three to 22 times more fiscal resources, while debt-financed corporate tax cuts can crowd out investment abroad and stronger anti-avoidance rules can protect revenue.

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