IMF Forecasts Rise in Global Inflation to 4.7% by 2026

The International Monetary Fund (IMF) has projected that global headline inflation will increase from 4.1% in 2025 to 4.7% in 2026, as stated in the July 2026 World Economic Outlook update. The report indicates that global economic growth is expected to be 3.0% in 2026 and 3.4% in 2027, reflecting a modest slowdown primarily due to the effects of the ongoing conflict in the Middle East.

This slowdown is partially offset by an acceleration in demand driven by advancements in technology, particularly artificial intelligence (AI). The report emphasizes that the impact of these factors will vary significantly depending on each country's exposure to conflict and technological value chains.

Risks to the economic outlook include potential renewed conflicts in the Middle East, commodity price volatility, and tightening financial conditions. The report also notes that inflation expectations have risen, with headline inflation increasing for the third consecutive month year-on-year as of May, breaking a downward trend that began in 2024.