IMF Sees Global Growth Holding at 3.3% in 2026 as Inflation Falls

The International Monetary Fund (IMF) has projected that the world economy will remain resilient, expanding by 3.3 per cent in 2026 before easing slightly to 3.2 per cent in 2027, according to its January World Economic Outlook update released Monday.

The forecast marks a modest upward revision for 2026 compared with the October 2025 outlook, underscoring the Fund’s confidence in global momentum despite persistent geopolitical and trade uncertainties.

Equally significant, global headline inflation is expected to continue its downward trajectory, falling from 4.1 per cent in 2025 to 3.8 per cent in 2026, and further to 3.4 per cent in 2027.

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The IMF noted that inflation is likely to return to target more gradually in the United States than in other advanced economies, but broadly accommodative financial conditions and private sector adaptability are helping to stabilize the outlook.

Among advanced economies, growth is projected at 1.8 percent in 2026 and 1.7 percent in 2027, while emerging markets and developing economies are expected to sustain growth just above 4.0 per cent in both years.

Sub-Saharan Africa is forecast to accelerate from 4.4 per cent in 2025 to 4.6 percent in 2026 and 2027, supported by macroeconomic stabilization and reform efforts. Nigeria’s economy is projected to expand by 4.4 per cent in 2026, before moderating to 4.1 per cent in 2027.

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The Middle East and Central Asia are expected to grow by 3.9 per cent in 2026 and 4.0 percent in 2027, buoyed by higher oil output and resilient domestic demand. Latin America and the Caribbean are forecast to slow to 2.2 per cent in 2026, before rebounding to 2.7 per cent in 2027, while emerging and developing Europe is projected to recover from a sharp slowdown in 2025 to 2.3 per cent in 2026 and 2.4 per cent in 2027.

The IMF cautioned that risks remain tilted to the downside, citing potential revaluation of technology expectations and escalating geopolitical tensions. On the upside, faster adoption of artificial intelligence could deliver strong productivity gains and business dynamism, while easing trade tensions could further lift activity.

The Fund urged policymakers to restore fiscal buffers, preserve price and financial stability, reduce uncertainty, and accelerate structural reforms, stressing that resilience at 3.3 percent growth with falling inflation offers a rare window of opportunity to secure sustainable expansion.