IMF says global growth on track to reach 3% in 2026, but risks remain high

By Andrea Shalal and Rodrigo Campos

WASHINGTON, Sept 10 (Reuters) - The IMF said on Thursday the global economy had weathered the energy shock caused by the war in the Middle East better than feared and global economic output was still expected to expand by about 3% in 2026, but it cautioned that risks remained high.

Julie Kozack, spokesperson for the International Monetary Fund, said oil and gas prices remained elevated and the energy shock from the war was not over. Global debt pressures were also mounting and the disinflation process over the 2022 cost of living crisis had stalled.

Global inflationary expectations have risen but remain well-anchored over the longer run, Kozack told a regular IMF briefing.

"So far, despite six months of war in the Middle East, the global economy has been resilient," Kozack said, adding that the use of oil and gas reserves had allowed some countries to cope with energy shocks caused by the war, while others had shifted to new energy sources or acted to curb demand.

"We remain on track for world growth of around 3% but uncertainty, as we've been saying for quite some time, continues to remain high," she said.

The IMF in July inched its 2026 global growth forecast lower again to a sluggish 3.0%, compared to an average of 3.5% seen in 2024 and 2025.

PULLED IN OPPOSITE DIRECTIONS

Kozack said the global economy was being pulled in opposite directions by the negative energy supply shock that was driving prices of energy, fertilizers, food and other commodities sharply higher, while the AI-led technology cycle was providing a positive demand shock.

Risks are high, with many countries needing to restock their oil and gas reserves, and energy demands set to rise as winter approaches in the Northern Hemisphere.

Pressures are also mounting on global public debt, which is already nearly at 100% of gross domestic product — the highest level since World War Two — and is set to rise further, Kozack said. Many advanced economies have particularly high public debt to GDP ratios.

Liquidity problems are also building in developing countries, including in Africa, partly due to a reduction in bilateral assistance, Kozack said.

The IMF is urging central bankers to stick to their price stability mandates, while encouraging fiscal policymakers to develop medium-term consolidation plans, she said.

Kozack said the IMF would look closely at the impact of new U.S. sanctions against Iran, including secondary sanctions aimed at firms in third countries that support Tehran.

(Reporting by Andrea Shalal and Rodrigo CamposEditing by Gareth Jones)