The International Monetary Fund (IMF) has projected global economic growth of 3.0% in 2026 and 3.4% in 2027, saying the world economy is being shaped by the opposing effects of the Middle East conflict and rapid advances in artificial intelligence (AI).
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In its July World Economic Outlook, the IMF said the war has created a negative supply shock, while the accelerating global technology cycle, driven largely by AI, is boosting economic activity.
The Fund said the global economy has so far weathered the impact of the conflict better than expected, with limited effects on commodity prices, inflation expectations and financial conditions. However, it warned that the full impact is still unfolding, with supply chain indicators and manufacturing activity pointing to slower momentum ahead.
According to the IMF, energy exporters outside the conflict zone are benefiting from higher commodity prices, while countries integrated into the global technology value chain are experiencing stronger growth, even if they import energy.
In contrast, many low-income countries that rely on energy imports and have limited participation in the technology sector are expected to face weaker economic activity.
The IMF also projected global inflation to rise from 4.1% in 2025 to 4.7% in 2026 before easing to 3.9% in 2027, indicating that the global disinflation trend has stalled.
The Fund warned that risks remain tilted to the downside, citing the possibility of a wider Middle East conflict, continued supply chain disruptions, trade fragmentation and a correction in technology-driven market expectations
