The International Monetary Fund (IMF) offers most recent forecast update for the global economy in its July World Economic Outlook. Over the next two years it expects:
- Global GDP growth forecast: World GDP growth is projected to slow at 3.0% in 2026 before strengthening to 3.4% in 2027. The slowdown reflected the impacts of the conflict in the Middle East, although stronger demand associated with artificial intelligence helped to partially offset the effect. Growth is expected to slow across most major economies in 2026 amid ongoing uncertainty and softer demand conditions, with a modest recovery anticipated in 2027.
- Advanced and emerging economies: Growth in advanced economies is forecast at 1.7% in 2026 and 1.8% in 2027, while emerging market and developing economies are projected at 3.8% in 2026 and 4.5% in 2027. The United States is forecast to grow by 2.3% in 2026 and 2.2% in 2027, while growth in the euro area is expected to slow to 0.9% in 2026 before improving to 1.2% in 2027. China’s economy is projected to grow by 4.6% in 2026 and 4.2% in 2027.
- Global consumer price inflation is forecast at 4.7% in 2026, easing to 3.9% in 2027. Inflation in advanced economies is expected to decline from 3.0% in 2026 to 2.4% in 2027, while inflation in emerging market and developing economies is projected to moderate from 5.8% to 4.8% over the same period.
- Australia’s outlook: Australia’s economic growth forecast for 2026 has been lowered by the IMF from 2% to 1.9% in 2026. Based on IMF projections, Australia ranks 18th out of 30 large economies in terms of expected growth performance. Australia is expected to experience a prolonged period of subdued economic growth, as renewed conflict in the Middle East risks keeping inflation elevated and increasing the likelihood of further interest rate rises.
IMF Economic Outlook, selected countries (July 2026)
| |
|
2025 |
2026 |
2027 |
| Real GDP growth, % |
World |
3.5 |
3.0 |
3.4 |
| Advanced economies |
1.9 |
1.7 |
1.8 |
| Emerging market and developing economies |
4.5 |
3.8 |
4.5 |
| Australia |
2.0 |
1.9 |
1.7 |
| United States |
2.1 |
2.3 |
2.2 |
| Euro area |
1.4 |
0.9 |
1.2 |
| China |
5.0 |
4.6 |
4.1 |
| Commodity prices, % |
Oil |
-14.4 |
31.8 |
-11.8 |
| Nonfuel |
9.9 |
18.6 |
1.3 |
| Consumer prices, % |
World |
4.1 |
4.7 |
3.9 |
| Advanced economies |
2.5 |
3.0 |
2.4 |
| Emerging market and developing economies |
5.2 |
5.8 |
4.8 |
