The International Monetary Fund has projected a slowdown in global economic growth to 3.1% in 2026, warning that rising geopolitical tensions—particularly the ongoing conflict in the Middle East—are increasingly weighing on the world economy.

The forecast is contained in the IMF’s April 2026 World Economic Outlook, which paints a weaker global outlook amid growing uncertainty in trade, investment and financial conditions.

The projected 3.1% growth represents a moderation from the roughly 3.4% expansion recorded in both 2024 and 2025, and falls below the long-term historical average of 3.7% between 2000 and 2019.

The IMF also revised its 2026 projection downward by 0.2 percentage points compared to its January update, reflecting the intensifying impact of geopolitical instability on global economic activity.

According to the Fund, its baseline scenario assumes that the Middle East conflict remains contained and that disruptions to global commodity markets ease by mid-2026. However, even under this assumption, the shock is expected to keep energy prices elevated, fuel inflation expectations and tighten global financial conditions.

These pressures are likely to offset gains from technology-driven investment and relatively accommodative macroeconomic policies in several major economies.

Inflation is projected to rise to 4.4% in 2026 before easing to 3.7% in 2027, indicating persistent price pressures driven largely by supply-side shocks linked to geopolitical conflict. The outlook marks an upward revision to inflation expectations, underscoring concerns that recent disinflation trends may not be sustained.

The IMF further noted that without the geopolitical shock, global growth in 2026 would have been stronger, closer to 3.4%, suggesting that much of the downgrade is attributable to disruptions in commodity markets and weakening global sentiment.

Emerging market and developing economies are expected to bear the brunt of the slowdown, particularly commodity-importing countries already facing fiscal and external vulnerabilities. Growth revisions for these economies are steeper than those for advanced economies, highlighting widening disparities in the global recovery.

The report outlines significant downside risks. A prolonged or escalating conflict could push global growth down to 2.5% in 2026, with inflation remaining elevated. In a more severe scenario involving major disruptions to energy infrastructure, growth could fall to around 2%, deepening macroeconomic instability across regions.

Beyond geopolitical tensions, the IMF also flagged risks including rising public debt, potential financial market corrections, trade tensions and weakening credibility of monetary policy frameworks.

While the Fund acknowledged potential upside drivers such as artificial intelligence-led investment and structural reforms, it cautioned that the global economy is entering a period of heightened uncertainty requiring stronger policy coordination among governments.

The findings underscore a fragile global recovery increasingly shaped by geopolitical shocks, with energy markets and inflation dynamics likely to remain central risks in the years ahead.