IMF Raises Global Economic Growth Forecast for 2026 by 0.1% to 3.1%

SadaNews Economy - The International Monetary Fund (IMF) has raised its forecast for global economic growth this year by 0.2 percentage points to 3%, with growth expected to gradually rise to 3.1% in 2026, due to slight improvements in economic outlook and a reduction in geopolitical threats, particularly in the oil market.

The Fund indicated in its updated report that achieving additional growth will remain contingent on the outcomes of global trade talks, and noted that the United States imposing lower-than-expected tariffs has helped alleviate pressure on trade flows.

Regarding inflation, the Fund expects that the inflation rate in the United States will remain above targeted levels in the upcoming period, despite expectations that interest rates will start to decline in both the United States and the United Kingdom during the second half of 2025.

As for the Eurozone, the Fund anticipates that interest rates will stabilize, while they are expected to gradually rise in Japan by the end of this year.

In reference to the U.S. debt issue, the Fund believes that the passage of President Donald Trump's tax plan has contributed to increased uncertainty regarding the sustainability of public debt in the United States.

The IMF raised its growth forecast for the U.S. economy by 0.1% to reach 1.9% this year, and also raised its forecast for China’s economic growth to 4.8% (an increase of 0.8 percentage points), while it reduced its forecast for Russia’s growth to 0.9% (-0.6 percentage points).

Regarding the Middle East, the Fund raised its forecast for Saudi Arabia’s economic growth this year to 3.6%, an increase of 0.6% from previous estimates, noting that oil supplies from OPEC+ and outside are still strong compared to demand levels.