The fund cites the situation in the Middle East as the main source of uncertainty. According to the IMF, a further escalation of the conflict could lead to another spike in oil and commodity prices, fuel inflation, and slow global economic growth, Euronews reports. At the same time, the stabilization of shipping through the Strait of Hormuz and a decline in commodity prices could improve global economic indicators.
Against this backdrop, the IMF has raised its global inflation forecast for 2026 to 4.7%. This is 0.3 percentage points higher than the April estimate. In 2027, inflation is expected to slow to 3.9%, though the Fund acknowledges that the process of price declines, which began in 2024, has virtually stalled.
Fertilizers and food products will create additional pressure. According to the Fund’s forecast, global fertilizer prices could rise by 26% as early as next year, and food prices by 8%. The main reasons are high energy costs and rising transportation expenses.
In Europe, the economic outlook is mixed. The IMF has downgraded its forecast for France: the country’s economy is now expected to grow by only 0.6% in 2026, instead of the previously projected 0.9%. In 2027, growth will be 0.9%.
The forecast for Germany remains subdued: according to the Fund’s estimates, Europe’s largest economy will grow by 0.7% in 2026 and 1% the following year.
The IMF has kept its forecast for Italy unchanged. The country’s economy is expected to grow by 0.5% in both 2026 and 2027. The Fund notes that investments under the National Recovery and Resilience Plan (PNRR) continue to support business activity. However, rising energy and food prices, as well as ongoing uncertainty, are holding back consumer spending. Meanwhile, the inflation forecast for Italy has been revised upward: due to the country’s high dependence on energy imports, the IMF estimates that inflation will remain above the target level through 2028.
Spain remains one of the fastest-growing economies in the eurozone. The IMF has maintained its GDP growth forecast at 2.1% for 2026 and 1.8% for 2027.
Outside Europe, China will continue to post the highest growth rates among the major economies. According to the Fund’s forecast, the country’s GDP will increase by 4.6% in 2026 and by 4.1% in 2027. Brazil’s economy will grow by 2.4%, while African countries will, on average, see growth ranging from 4.3% to 5.2%, although the gap between individual countries will remain significant.
The IMF urges governments and central banks to maintain tight anti-inflationary policies, strengthen energy security, and accelerate structural reforms that will help economies adapt to new challenges, including the development of artificial intelligence technologies.
