IMF has projected global economic growth to slow to 3.0 per cent in 2026 before rebounding in 2027, while forecasting Nigeria’s economy to expand by 4.1 per cent, supported by improved macroeconomic stability.
The International Monetary Fund (IMF) has projected that global economic growth will slow to 3.0 per cent in 2026 before recovering to 3.4 per cent in 2027, while forecasting Nigeria’s economy to grow by 4.1 per cent next year.
The projections are contained in the IMF’s July 2026 World Economic Outlook (WEO) Update, titled “Global Economy in Crosscurrents of War and Technology,” released on Wednesday.
According to the report, the global economic outlook remains uneven as the ongoing conflict in the Middle East continues to weigh on energy-importing and vulnerable economies, while rising demand driven by Artificial Intelligence (AI) is boosting countries integrated into the global technology value chain.
The IMF said the impact of current global developments varies significantly depending on countries’ exposure to geopolitical conflicts and their participation in technology-driven industries.
It noted that energy exporters outside conflict zones are benefiting from favourable terms of trade, while economies linked to the AI-driven technology boom are experiencing stronger economic activity, even where they depend on imported energy.
However, the Fund warned that energy-importing countries with limited participation in the technology value chain, including many low-income economies, are likely to experience weaker economic activity.
The report projected global headline inflation to increase from an estimated 4.1 per cent in 2025 to 4.7 per cent in 2026, before easing to 3.9 per cent in 2027.
According to the IMF, the revised projections indicate that the global disinflation trend observed since early 2024 has stalled.
For Sub-Saharan Africa, the Fund expects economic growth to remain steady at 4.3 per cent in 2026, rising to 4.5 per cent in 2027, although it noted that performance will vary across countries depending on policy implementation, fiscal space and exposure to external shocks.
The report said oil-importing and non-resource-intensive economies are expected to face greater challenges from rising energy and food prices, while some larger African economies will continue to benefit from earlier economic reforms despite reduced official development assistance.
For Nigeria, the IMF forecast economic growth of 4.1 per cent in 2026, increasing to 4.3 per cent in 2027.
The Fund attributed the outlook to improved macroeconomic stability and favourable terms of trade but cautioned that rising prices of essential goods could worsen poverty and food insecurity.
Among advanced economies, the IMF projected growth of 1.7 per cent in 2026 and 1.8 per cent in 2027.
Growth in emerging markets and developing economies is expected to slow to 3.8 per cent in 2026 before recovering to 4.5 per cent in 2027.
The IMF also forecast economic growth in the Middle East and Central Asia to decline sharply to 0.7 per cent in 2026 before rebounding strongly to 6.5 per cent in 2027.
For Latin America and the Caribbean, growth is projected to remain stable at 2.4 per cent in 2026 before rising modestly to 2.7 per cent in 2027, while emerging and developing Europe is expected to maintain restrained growth of around 2.0 per cent.
Despite describing risks to the global economy as more balanced than in its April outlook, the IMF warned that they remain tilted to the downside.
The Fund identified renewed conflict in the Middle East, prolonged commodity price volatility, supply chain disruptions, trade fragmentation, potential corrections in technology-driven markets and weakening policy buffers as key threats to global growth.
On the positive side, it said faster normalisation of energy markets, stronger investment in AI, renewed international cooperation on trade and continued structural reforms could improve medium-term growth prospects.
The IMF urged governments and policymakers to maintain price stability through independent central banks, strong financial supervision and clear policy communication.
It also recommended rebuilding fiscal buffers, limiting fiscal support to targeted and temporary measures, and pursuing structural reforms that strengthen energy security, improve AI readiness and deepen international cooperation to sustain long-term global economic growth.
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