- BIST10012,261-0.04%
- USD49.34+0.24%
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- GOLD4,211.30+0.49%
- INTEREST37.00%-1.00
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- October 13, 202618°
- BIST10012,261-0.04%
- USD49.34+0.24%
- EUR55.21-0.01%
- GOLD4,211.30+0.49%
- INTEREST37.00%-1.00
- BITCOIN83,240+1.82%
- October 13, 202618°
IMF projects 3.1% growth for the global economy in 2026
The IMF expects the global economy to grow by 3.1% in 2026 and 3.4% in 2027. The report projects global inflation to rise to 4.7% in 2026 before falling to 4.1% in 2027, while Türkiye's economy is expected to grow by 2.7% and 3.6%, respectively.
The IMF published the October edition of its World Economic Outlook report. The report said the global economy has remained resilient, but that resilience has not been evenly distributed across countries.
The global economy is expected to grow by 3.1% in 2026 and 3.4% in 2027. In its July projections, the IMF had forecast growth of 3% in 2026 and 3.4% in 2027, while in April it had projected rates of 3.1% and 3.2%, respectively.
Impact of artificial intelligence investment on global growth
Economic activity in the first half of 2026 performed better than expected despite pressure from the prolonged war in the Middle East and trade tensions. The report said a technology cycle driven by strong investment in artificial intelligence supported demand.
Global headline inflation is expected to rise to 4.7% in 2026, driven by temporary increases in energy and food prices, before falling to 4.1% in 2027. Growth in global trade volume is expected to slow in 2026 and stabilize in 2027.
The report identified the negative effects of tariffs, the adjustment process in production chains and strong technology-related trade as factors shaping the trade outlook. It said global imbalances would decline only modestly over the medium term, while the growth outlook would remain weak compared with historical averages and continue to differ across countries.
Middle East tensions pose downside risk to growth
The IMF said risks were tilted to the downside. It warned that if a prolonged impasse continued in the Middle East or tensions escalated, energy and food prices could remain high and volatile, inflationary pressures could intensify and growth could come under pressure.
Projections for the US and European economies
The growth forecast for the US economy was kept at 2.3% for 2026, while the 2027 forecast was raised from 2.2% to 2.3%. The eurozone's growth forecast for 2026 was raised from 0.9% to 1.1%, while the 2027 forecast was left unchanged at 1.2%.
Germany's growth forecast was raised from 0.7% to 1.3% for 2026 and from 1% to 1.1% for 2027. France's growth forecast was lowered from 0.6% to 0.4% for 2026 and from 0.9% to 0.7% for 2027.
Italy's growth forecast was raised from 0.5% to 0.8% for 2026 and from 0.5% to 0.6% for 2027. Spain's growth forecast for 2026 was raised from 2.1% to 2.5%, while its 2027 forecast was maintained at 1.8%.
The UK's growth forecast was raised from 1% to 1.3% for 2026 and lowered from 1.3% to 1.2% for 2027. Canada's growth forecasts were maintained at 1.1% for 2026 and 1.7% for 2027. Japan's growth forecast for 2026 was raised from 0.6% to 0.7%, while its 2027 forecast was left at 0.7%.
China's growth forecast cut
China's growth forecast was lowered from 4.6% to 4.5% for 2026 and from 4.1% to 4% for 2027. India's growth forecast was raised to 7% for both 2026 and 2027.
The growth forecast for Russia was lowered from 1.1% to 0.9% for both 2026 and 2027.
Türkiye's economy expected to grow by 2.7%
The IMF expects Türkiye's economy to grow by 2.7% in 2026 and 3.6% in 2027. In its July projections, the Fund had forecast growth of 2.9% for Türkiye in 2026 and 3.6% in 2027.
Year-end inflation in Türkiye is expected to be 31.2% in 2026 and 26.5% in 2027.
Three key risks to the financial system
The October 2026 edition of the IMF's Global Financial Stability Report said global financial markets had remained resilient, supported by economic growth and corporate profitability. However, a market correction driven by artificial intelligence, a sharp rise in government bond yields and cyberattacks were listed as the main risks.
The report warned that these risks could trigger broader financial stress if combined with high borrowing, scarce liquidity and strong links between markets. It said asset prices linked to the artificial intelligence sector could undergo a correction if investment and profitability in the sector fell short of expectations.
According to the IMF's analysis, 14 financing transactions since 2023 involved approximately $300 billion in equity investment and $650 billion in borrowing in exchange for commitments on $1.4 trillion in future revenue.
Warning on bond yields and cyberattacks
Inflationary pressure from rising energy prices, fiscal concerns and strong growth in some economies were identified as factors pushing up government bond yields. The report said bond yields were likely to return to levels seen before the global financial crisis, while high fiscal imbalances and leveraged transactions in bond markets could create negative feedback loops.
It said cyberattacks had become one of the growing sources of systemic risk as the financial sector became more digitalized and interconnected. A major attack could disrupt payment systems, trading, access to deposits and other critical financial services.
In more than 70% of the incidents reported this year, attackers exploited vulnerabilities in software providers before those vulnerabilities were fixed. The report said advanced artificial intelligence models could accelerate both attacks and defensive capabilities.
Vulnerabilities in the banking system
The global banking system has generally remained resilient, but weak links persist. In an adverse stress scenario, banks representing 22% of global banking assets could see their capital adequacy ratios fall below legal requirements; the figure was 18% a year earlier.
The shift by non-bank financial institutions toward illiquid assets and derivatives, their growing dependence on the same asset managers and deepening links with banks were listed among the factors that could increase the spread of financial shocks.
The report said bond yields had risen in emerging economies and warned that global shocks could weaken these countries' economic buffers and increase their external vulnerabilities.
Three priorities for policymakers
The report said policymakers had less room to support the economy against potential shocks because of high public debt, renewed inflationary pressures and rising borrowing costs.
The IMF identified placing public debt on a sustainable path, limiting leverage and liquidity mismatches in artificial intelligence, private credit and other non-bank financial sectors, and strengthening cyber defense capacity as priority policy areas.
It said emerging economies should rebuild their economic buffers while financial conditions remained favorable, adding that proactive policies were important for preparing for potential shocks as risks increased.
Source: Anadolu Ajansı
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