The IMF's April 2026 World Economic Outlook projects global growth at 3.1 percent for 2026 and 3.2 percent in 2027, a downward revision driven largely by a new Middle East conflict that erupted in late February and is disrupting commodity markets, inflation expectations, and financial conditions.
Without the war, growth could have reached 3.4 percent in 2026, but under an adverse scenario it could fall as low as 2.5 percent. Emerging market and developing economies bear a disproportionate share of the slowdown, with growth revised down 0.3 percentage points, while the Middle East and Central Asia region faces the sharpest contraction, with growth expected to drop from 3.6 percent in 2025 to just 1.9 percent in 2026. The report also examines the broader structural pressures reshaping the global economy, from rising defense spending and geopolitical fragmentation to the supply risks around rare earth elements and the long-term productivity promise of artificial intelligence.
