Global economy to stay steady in 2026 despite trade and geopolitical risks: IMF

Key Highlights

• While shifting trade policies, elevated uncertainty, and geopolitical tensions continue to weigh on economic activity, these headwinds are being offset by strong investment in artificial intelligence and technology, accommodative financial conditions and continued fiscal and monetary support in several major economies.
• Investment related to AI has been particularly strong in North America and parts of Asia, providing a significant boost to output and trade.
• Global inflation is expected to continue its downward trajectory, declining from an estimated 4.1 per cent in 2025 to 3.8 per cent in 2026 and further to 3.4 per cent in 2027.
• Inflation is projected to return to target levels more slowly in the United States than in other major economies, reflecting the gradual pass-through of higher tariffs and persistent cost pressures.
• In contrast, inflation in most advanced economies is expected to converge toward target levels by 2027, supported by easing energy prices and moderating demand.