The International Monetary Fund said on Thursday that the global economy has weathered the energy shock caused by the war in the Middle East better than feared, and global economic output is still expected to grow by about three percent in 2026, but it warned that risks remain high.
IMF spokesperson Julie Kozack said that oil and gas prices remain high, and that the energy shock resulting from the war is not over yet. She added that global debt pressures are mounting, and that the disinflation process following the 2022 cost-of-living crisis has stalled.
During a regular press briefing for the Fund, she noted that global inflation expectations have risen, but remain stable in the long term.
"So far, and despite six months of war in the Middle East, the global economy has shown resilience," she said, adding that drawing on oil and gas reserves has allowed some countries to cope with the energy shocks caused by the war, while other countries have turned to new energy sources or taken measures to curb demand.
"We remain on track for global growth of about three percent, but uncertainty, as we have been saying for a long time, remains high," she continued.
In July, the Fund had slightly lowered its global growth forecast for 2026 again to three percent, a weak rate compared to the 3.5 percent average recorded in 2024 and 2025.
Opposing forces
Kozack said the global economy is being affected by opposing forces, as a negative supply shock in the energy sector leads to a sharp rise in the prices of energy, fertilizers, food, and other commodities, while the AI-led technology cycle provides a positive demand shock.
She mentioned that risks are high, as many countries need to rebuild their oil and gas reserves, while energy demand is expected to rise as winter approaches in the Northern Hemisphere.
Kozack said pressures are also mounting on global public debt, which is already at about 100 percent of GDP, the highest level since World War II, and is expected to rise further. She said that public debt-to-GDP ratios are particularly high in many advanced economies.
She pointed out that liquidity problems are also worsening in developing countries, including African nations, due to reasons including a decline in bilateral aid.
She added that the Fund urges central bank governors to adhere to their mandates regarding price stability.
Kozack said the Fund will closely study the impact of new US sanctions on Iran, including secondary sanctions targeting companies in third countries that support Tehran.
