Washington:The International Monetary Fund (IMF) has projected a global economic growth rate of 3.1% for 2026 and 3.4% for 2027. However, the organization has issued warnings about significant economic challenges in the Middle East and China due to ongoing conflicts.

According to Anadolu Agency, the IMF's October 2026 World Economic Outlook report maintains a stable near-term global forecast but highlights a deeply fractured economic outlook. The Eurozone is expected to grow by 1.1% this year, while the US economy is forecast to expand by 2.1%.

The report indicates that 47% of economies are experiencing downgraded growth forecasts compared to earlier estimates. The Middle East and Central Asia have faced the most severe revisions, with a 2026 growth forecast now at minus 0.3%, a drop of 2.2 percentage points. This decline is attributed to prolonged regional conflicts and extended closure of the Strait of Hormuz.

Countries such as Bahrain, Iraq, Kuwait, and Qatar, heavily reliant on energy production and transport, are expected to suffer double-digit economic contractions in 2026. Additionally, Saudi Arabia is anticipated to see a 3.3% contraction this year.

In China, the IMF has revised the 2026 growth forecast down to 4.5%, citing higher global oil prices, ongoing uncertainty, and structural challenges. Issues such as sluggish domestic consumption and continued property sector strains are expected to further impact China's economic performance.

The report emphasizes a global economic divide influenced by geopolitics and technology. Economies that import energy and have limited connections to the technology value chain are likely to face higher import costs, exchange rate pressures, and constrained fiscal space, risking an increase in global income disparities.

Global headline inflation is predicted to rise to 4.7% in 2026, driven by conflict-related negative supply shocks affecting energy and food prices.