IMF Warns the Global Economy Is Nearing the Limits of Its Resilience
The IMF has warned that the global economy may be approaching the limits of its resilience after weathering the US-Iran war better than initially feared. Rerouted oil shipments and emergency stock releases helped contain prices despite disruption around the strait of Hormuz, but energy inventories are dwindling. The US strategic petroleum reserve has reportedly fallen to its lowest level since 1982, while heavy public debts and deficits leave many governments with limited scope to shield households from another surge in costs.
The IMF raised its 2026 global growth forecast slightly, from 3% to 3.1%, and left its 2027 projection at 3.4%. US growth is expected to remain at 2.3% in both years. It upgraded the UK’s 2026 forecast by 0.3 percentage points to 1.3%, but lowered its 2027 estimate to 1.2% as expensive energy and elevated long-term interest rates weigh on consumption and investment.
Risks remain tilted to the downside. A prolonged Middle East stalemate or renewed escalation could push energy and food prices higher, with infrastructure disruption, cyber-attacks or extreme weather compounding the damage. Global inflation is forecast at 4.7% in 2026 and 4.1% in 2027. The IMF advised central banks not to overreact to temporary price spikes, while remaining ready to act if inflation becomes entrenched, and also flagged the continuing danger of an AI-driven market crash.
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