Global inflation to fall to 3.8% in 2026, 3.4% in 2027: IMF chief
Global inflation is projected to drop to 3.8 per cent this year and 3.4 per cent in the next backed by softer demand and lower energy prices, International Monetary Fund (IMF) managing director Kristalina Georgieva has said.
The world economy is projected to grow at 3.3 per cent this year and 3.2 per cent next year, supported by the agility of the private sector, accommodative financial conditions and sustained reforms, especially in emerging markets, she told the Annual Arab Fiscal Forum in Dubai.
Global growth has held up ‘remarkably well’ amid profound shifts in geopolitics, trade policy, technology and demographics, she said.
Global inflation is projected to drop to 3.8 per cent in 2026 and 3.4 per cent in 2027 backed by softer demand and lower energy prices, IMF MD Kristalina Georgieva has said.
Global growth has held up ‘remarkably well’ amid profound shifts in geopolitics, trade policy, technology and demographics, she told a forum in Dubai.
She called for more trade integration as unilateral trade pacts are on the rise.
Georgieva called for more trade integration as unilateral trade agreements are on the rise and global resilience will continue to be tested in the months and years to come.
“Geopolitical tensions are exacerbating uncertainty, trade tensions and protectionism dent prospects for investment and growth. AI-driven productivity gains may prove overly optimistic. Large and rising debts in many countries are projected to reach unprecedented levels in the coming years. Fiscal strains, especially in advanced economies, could raise global borrowing costs,” she noted.
Oil price volatility is another central concern for the Middle East region, she said. Prices may weaken if global demand softens amid trade tensions and geo-economic fragmentation.
Oil exporters face the challenge of managing oil-price volatility while advancing economic diversification. Oil importers face significant debt vulnerabilities and exposure to global financing conditions, highlighting the need for fiscal buffers and credible medium-term fiscal frameworks, she said.
Low-income and fragile economies face conflict, displacement and food insecurity. The urgent need in these countries is to establish macroeconomic stability and access to external financing, including international support and debt relief.
For reforms in the Arab region, strengthening fiscal credibility and rebuilding fiscal buffers are essential, she added.
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