The IMF expects the world economy to grow 3.1% in 2026, slightly better than it forecast in July. But growth is now concentrated in fewer countries: AI-linked economies are surging while Gulf energy producers contract.

Key details of the WEO report:

  • Global growth: 3.1% in 2026, up from the 3.0% forecast in July. Growth was 3.5% in 2025, and the IMF expects 3.4% in 2027.
  • Advanced economies: 2.1% in 2026. Emerging and developing economies slow from 4.5% to 3.7%.
  • Growth is concentrating: 32 economies now account for 95% of global growth, down from 54 in the April 2026 forecast.
  • Major economies: US 2.3%, China 4.5%, euro area 1.1%, Japan 0.7% and UK 1.3%.
  • India: 7.0% for FY2026/27, or 7.4% on a calendar-year basis. The IMF raised its forecast by 0.6 percentage points.
  • AI winners: Taiwan 10.7% and Korea 3.3%. The two supply 62% of net trade in AI computing hardware.
  • Middle East and Central Asia: the region contracts 0.3% in 2026, then rebounds to 6.3% in 2027. Saudi Arabia shrinks 3.3%. Kuwait, Iraq and Qatar each shrink by more than 15%.
  • Inflation: global inflation rises to 4.7% in 2026, from 4.1% in 2025.
  • Oil: prices average $95.74 a barrel in 2026, up 41% on 2025.
  • Key assumption: the Strait of Hormuz reopens in March 2027.
  • Downside scenario: the war lasts to June 2027 and oil hits $130 a barrel.

Body:
The IMF expects the global economy to grow 3.1% in 2026, slightly better than its July forecast but well below 2025’s 3.5%. Its October 2026 World Economic Outlook says spending on artificial intelligence is offsetting the hit from the Iran war. Taiwan, at 10.7%, and Korea are riding demand for chips. Gulf producers face double-digit contractions while the Strait of Hormuz stays shut. The IMF’s word for the outlook is “highly uneven”: just 32 economies now produce 95% of global growth. India stays the fastest-growing major economy at 7.0%. Inflation rises to 4.7% as oil averages close to $96 a barrel. The IMF says risks remain tilted to the downside.