IMF forecasts 3.1% global growth in 2026, with eurozone at 1.1%

The International Monetary Fund (IMF) on Tuesday has raised its 2026 global growth forecast to 3.1%, citing resilience in advanced economies and increased AI investment.

However, growth will still slow from 3.5% in 2025, while high energy prices linked to the US–Iran war pose significant risks, particularly for low-income countries excluded from the AI-driven investment boom.

Meanwhile, economic growth in the eurozone will slow to 1.1% this year before a slight acceleration in 2027, the IMF said, due to persistently high energy costs and weak consumer confidence.

The 2026 forecast in the latest World Economic Outlook by the International Monetary Fund was a slight upgrade of 0.2 percentage points from its July report and follows 1.2% growth last year.

Although eurozone GDP growth rebounded to 2.6% in the second quarter of this year after zero growth in the first three months, the fund expects inflation risks to persist well into next year.

The Middle East conflict and Russia's ongoing war against Ukraine have sent oil and natural gas costs surging around the globe, a major threat to the eurozone and other economies that import most of their energy needs.

The IMF noted in particular that "gas inventories remain below seasonal norms in parts of Europe, leaving gas market conditions vulnerable to adverse weather ahead of the winter heating season".

Inflation is forecast at 3.1% this year and 2.8% next year, well above the European Central Bank's target of 2%.

That could require ECB interest rates that curb household spending and investment, with eurozone GDP expected to edge up to just 1.2% in 2027.

Growth in Germany, Europe's biggest economy, is expected to reach 1.3% this year, and Spain's GDP growth will remain strong at 2.5%.

But France's economy is seen expanding by just 0.4% this year, sharply below the 0.9% growth in 2025, with unemployment rising to 8.4% from last year's 7.7%.

For Britain, the IMF raised its growth forecast for this year to 1.3%, up 0.3 percentage points from July.

But UK growth is expected to slow to 1.2% next year "as higher energy prices and long-term interest rates weigh on consumption and investment."