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The International Monetary Fund (IMF) has raised its 2026 global economic growth forecast to 3.1 per cent, citing robust investment gains in artificial intelligence (AI) even as ongoing conflicts in the Middle East strain global markets.
In its latest World Economic Outlook report, titled “Resilience under Strain, Urgent Choices,” the global financial institution projects worldwide growth to moderate from 3.5 per cent in 2025 down to 3.1 per cent in 2026, before rebounding to 3.4 per cent in 2027.
According to the fund, global economic momentum is increasingly concentrated, with just 32 economies accounting for 95 per cent of global growth. Furthermore, nearly half of the world’s economies have seen their individual growth forecasts downgraded.
The IMF noted that global growth is being redistributed rather than uniformly slowing or accelerating. This divergence depends heavily on a nation’s exposure to energy supply disruptions and its integration into the lucrative AI hardware supply chain.
“Economies with limited exposure to energy shocks and strong links to the AI hardware supply chain are performing better,” the report stated.
Conversely, energy-importing countries with minimal ties to the technology boom particularly low-income nations are grappling with soaring import costs, weaker local currencies, and declining real incomes.
The baseline projection assumes the vital Strait of Hormuz will reopen in March 2027, with normalcy returning by October.
Without alternative supply responses, the IMF estimated the waterway’s closure would have shaved 0.9 percentage points off global growth this year. However, redirected Gulf oil supplies, increased global production, inventory drawdowns, and lower overall oil intensity have curbed the estimated impact to roughly 0.3 percentage points.
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