The Hindu·4 min read·hard

IMF upgrades 2026 growth forecast but warns of ‘split’ outlook

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IMF upgrades 2026 growth forecast but warns of ‘split’ outlook
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The IMF has slightly upgraded its 2026 global growth forecast to 3.1%, citing resilience in advanced economies despite energy price shocks caused by the ongoing war between the U.S. and Iran. However, the organization warned that low-income nations remain highly vulnerable to supply chain disruptions.

Why it matters

The report highlights the widening economic divide between AI-driven advanced economies and developing nations struggling with energy costs and geopolitical conflict.

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he International Monetary Fund on Tuesday (October 13, 2026) forecast global growth in 2026 would slow less than previously expected because of advanced economies’ “resilience” in the face of war-fuelled energy prices, but warned low-income countries remained vulnerable to the supply shock.

In its World Economic Outlook (WEO) released at the organization’s Annual Meetings in Bangkok, the IMF raised its 2026 global growth forecast by 0.1 percentage points to 3.1%, compared with 3.5% growth in 2025.

It warned that while many advanced economies have been buoyed by rising investment in artificial intelligence (AI) technology, poorer countries that are not benefiting from that boom face stark choices as they deal with high energy prices caused by the Iran war.

“The global economy has been resilient, but that resilience is under strain, with risks tilted to the downside,” Silvana Tenreyro, the IMF’s chief economist, told journalists in Bangkok.

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