The International Monetary Fund has revised its forecast for global economic growth in 2026 downward, reducing the expected rate from 3.3% to 3.1%.
This is reported by Finway
Main Reasons for the Downgrade
In January, the IMF projected a global economic growth rate of 3.3% for 2026 and anticipated an average oil price of around $62 per barrel. However, due to the escalation of conflict in the Middle East and uncertainty in energy markets, the Fund was compelled to adjust its expectations. According to experts, if it weren’t for military actions in the region, growth could have reached 3.4%. Positive drivers would include active investments in the technology sector, reductions in central bank key rates, decreases in trade barriers in the U.S., and government support for the economies of individual countries.
Scenarios for Global Economic Development
Under an optimistic scenario, which assumes a swift end to the war in Iran and an average oil price of $82 per barrel in 2026, the global economy could maintain a growth rate of 3.1%. Currently, the price of oil hovers near the $100 per barrel mark.
If oil prices remain at $100 per barrel in 2026 and drop to $75 in 2027, the global economic growth rate could fall to 2.5%.
“The IMF also does not rule out a crisis scenario, under which global economic growth could slow to 2.0%, pushing the world to the brink of a global recession. Such figures were last observed during the COVID-19 pandemic and after the 2008 financial crisis.”
In this worst-case scenario, the average oil price in 2026 could rise to $110 per barrel, and in 2027 to $125 per barrel. At the same time, global inflation is projected to rise: according to pessimistic estimates, it will exceed 6% on an annual basis, while optimistic estimates place it at 4.4%.
Among the regions most affected by negative trends, IMF analysts cite countries in the Middle East. In particular, Iran’s GDP may shrink by 6.1%, Qatar by 8.6%, Iraq by 6.8%, Kuwait by 0.6%, and Bahrain by 0.5%.