IMF trims 2026 growth forecast to 3.1% amid Middle East conflict: Report

The International Monetary Fund cut its global growth forecast for 2026 to 3.1% in its April update.

The new figure is 0.2 percentage points lower than its January estimate and reflects weaker momentum in the world economy.

The IMF said the downgrade is tied largely to disruption from the ongoing Middle East conflict. It added that without the war, the outlook would have improved instead, with growth revised up by 0.1 percentage point to 3.4%.

Inflation forecast moves higher for 2026

The IMF also raised its headline inflation forecast for 2026. It now expects global inflation to reach 4.4% this year before easing to 3.7% in 2027.

At the same time, the Fund left its 2027 global growth forecast unchanged from the January World Economic Outlook update. The report showed that while growth is slowing in 2026, inflation may stay higher for longer before moving lower next year.

Additionally, the IMF said the economic strain is not spread evenly across countries. Emerging markets saw their 2026 growth forecast cut by 0.3 percentage points, while projections for advanced economies stayed mostly unchanged.

The Fund said ”there is a high degree of cross-country dispersion in the reference forecast.” It also said the burden is heavier on the conflict region and on more vulnerable economies, especially commodity-importing emerging market and developing countries with existing weaknesses.

IMF warns of more downside risk

The report also outlined a weaker scenario if energy prices rise more sharply and stay high for longer. In that case, the IMF said global growth could slow to 2.5% in 2026, while inflation could rise to 5.4%.

The Fund said a more severe shock, including damage to energy infrastructure in the conflict region, could push global growth down to around 2% and lift inflation above 6% by 2027. It said emerging and developing economies would again face the largest pressure, with the effect nearly twice as large as in advanced economies.

The IMF said it used a ”reference forecast” instead of a traditional baseline for this update. The change reflects the difficulty of building stable assumptions while geopolitical and energy risks remain elevated.