IMF Sees Uneven Growth Amid Energy Shock

The International Monetary Fund has raised its forecast for global economic growth in 2026 to 3.1%, a 0.2-percentage-point increase from its July outlook. The upgrade reflects resilient advanced economies and stronger investment related to artificial intelligence, but growth is still expected to slow from 3.5% in 2025. The IMF warns that high energy prices—driven in part by the US–Iran war and Russia’s war against Ukraine—pose a significant downside risk, especially for energy-importing and low-income countries that are not benefiting from the AI investment boom. Eurozone growth is forecast at 1.1% in 2026, followed by only 1.2% in 2027. Persistently high energy costs and weak consumer confidence are expected to weigh on activity. Inflation is projected at 3.1% this year and 2.8% next year, above the European Central Bank’s 2% target, while core inflation is expected to return to target only gradually. The IMF also notes that European gas inventories are below seasonal norms in some areas, increasing vulnerability ahead of winter. Economic prospects vary across Europe: Germany is forecast to grow 1.3% and Spain 2.5% in 2026, while France is expected to expand by just 0.4%, with unemployment rising. The UK’s forecast was upgraded to 1.3% for this year, but growth is expected to ease to 1.2% in 2027. China’s growth is projected to slow to 4.5%, largely because of weak domestic demand. Global inflation, meanwhile, is expected to rise to 4.7% in 2026. IMF Chief Economist Tenreyro called for urgent action, recommending temporary, targeted fiscal support and monetary policy focused on price stability. She cautioned that the economy’s resilience is nearing its limits and urged governments to rebuild fiscal capacity and supply-side resilience. The IMF describes the global outlook as increasingly divided: conflict and energy costs threaten vulnerable economies, while a reassessment of AI-related returns could abruptly weaken investment and financial conditions.

The France 24 report says the International Monetary Fund has slightly raised its forecast for global economic growth in 2026 to 3.1%. The stated reasons include resilience among advanced economies and investment in artificial intelligence. The forecast upgrade comes despite rising energy prices associated with the US-Iran war, which the report identifies as a source of economic pressure. The IMF also warns that the outlook is split: low-income countries are especially vulnerable to the crisis, in contrast with the relative resilience cited for advanced economies. This points to an uneven distribution of economic risks and capacity to withstand them. The supplied article text is brief and appears to introduce a video analysis by France 24 correspondent Douglas Herbert rather than provide the analysis itself. It does not include further details about the IMF’s assumptions, the scale of the forecast change, country-level projections, or the specific channels through which the conflict and energy prices may affect economies. Accordingly, the central message available here is limited: the global growth projection has improved modestly, but the improvement masks significant differences in countries’ exposure and resilience. The report’s framing emphasizes both the positive forecast revision and the risks facing low-income countries, rather than presenting the upgrade as an unqualified indication of global economic strength.

The International Monetary Fund has sharply reduced its 2026 growth forecasts for Gulf economies because the Iran war has prolonged the closure of the Strait of Hormuz, disrupting energy exports and shipping. The IMF expects the Middle East and North Africa economy to contract by 2 per cent in 2026, a 3.1-percentage-point downgrade from its April outlook and the only regional contraction forecast worldwide. Bahrain, Kuwait and Qatar are expected to suffer double-digit contractions; the UAE is forecast to shrink 3.9 per cent and Saudi Arabia 3.3 per cent. Oman is the only Gulf Co-operation Council member expected to grow this year, at 4.1 per cent. The revised outlook assumes the strait will begin reopening gradually in March 2027 and return to pre-war conditions by October. If shipping routes normalise, the IMF anticipates a strong rebound in oil-exporting economies in 2027. It forecasts growth of 7.7 per cent in the UAE, 7.9 per cent in Saudi Arabia, and double-digit expansion in Bahrain, Kuwait and Qatar. Saudi Arabia’s diversified export routes are expected to cushion its downturn compared with some Gulf neighbours. The IMF maintained its forecast for global growth at 3.1 per cent in 2026 and raised its 2027 projection to 3.4 per cent. It said the global economy has so far absorbed the energy shock through supply adjustments, inventory use and adaptation to higher prices, but warned that resilience is reaching its limits. The Iran war’s negative supply shock and a positive demand shock from the AI infrastructure boom are both contributing to inflation. Global inflation is projected to rise to 4.7 per cent in 2026 before easing to 4.1 per cent in 2027, increasing pressure on borrowing costs and already high public debt. The IMF urged governments to restore fiscal capacity and strengthen supply-side resilience.