IMF warns global economy ‘could soon test the limits of resilience’
World Economic Outlook says states’ oil stocks are low and budgets are overstretched, as it upgrades UK GDP growth forecast for 2026
The global economy “could soon test the limits of resilience”, as emergency oil stocks run low and government budgets become overstretched, the International Monetary Fund has warned.
In its twice-yearly World Economic Outlook, the IMF said global growth had withstood the Middle East conflict better than feared over the past six months.
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The IMF cut its UK growth forecast for next year modestly to 1.2% from 1.3%.
"It cut its UK growth forecast for next year modestly to 1.2%, from 1.3%."
The IMF revised up its forecast for global economic growth this year marginally to 3.1%.
"In the report, the IMF revised up its forecast for global economic growth this year marginally, to 3.1% – against 3% in its last update in July. Next year's forecast is unchanged, at 3.4%."
The International Energy Agency announced the largest-ever emergency releases of oil stocks on to the market in March this year.
"The International Energy Agency announced the largest-ever emergency releases of oil stocks on to the market in March this year, and promised to accelerate it after a meeting of oil ministers last month."
Donald Trump agreed a deal with Vladimir Putin to temporarily lift sanctions on US imports of Russian diesel last week in an attempt to bring down prices at the pumps.
"Last week, Donald Trump agreed a deal with Vladimir Putin to temporarily lift sanctions on US imports of Russian diesel in an attempt to bring down prices at the pumps."
The IMF forecast global inflation of 4.7% this year, declining to 4.1% in 2027.
"Global inflation is expected to be 4.7% this year – the same level as forecast in July – and to decline to 4.1% in 2027 – up from 4% in the last update."
The IMF predicted GDP growth of 1.3% for the UK this year, up 0.3 percentage points from its July update.
"The IMF predicted GDP growth of 1.3% for the UK this year – up 0.3 percentage points from its most recent update in July – in welcome news for the chancellor, John Healey, who is set to arrive in Bangkok later this week."
IMF managing director Kristalina Georgieva urged governments to tighten their belts amid rising global debt levels.
"Ahead of the gathering, the IMF managing director, Kristalina Georgieva, urged governments to tighten their belts, amid rising global debt levels."
""We cannot keep delaying necessary policy action – you have the tools, now have the wisdom to use them," she said."
The IMF warned that the global economy could soon test the limits of its resilience, citing depleted emergency oil stocks and overstretched government budgets.
"The global economy "could soon test the limits of resilience", as emergency oil stocks run low and government budgets become overstretched, the International Monetary Fund has warned."
""Without shoring up supply capacity and replenishing policy buffers, the global economy could soon test the limits of resilience," it said."