Navigating a Precarious World

Despite challenges from geopolitical shocks, ongoing conflicts, and major shifts in the global trading system, 2025 was characterized by resilience. Thanks to private sector agility, fiscal and monetary policy support, and technology-related investment, global growth held up and inflation continued to decline. These factors drove a slight upgrade in IMF global growth forecasts at the start of 2026.

Beginning at the end of February, war in the Middle East significantly altered that trajectory. Even though conflict-related disruptions were felt most directly in that region, the supply shock to energy and other commodities—and impacts on broader supply chains—caused significant hardship far beyond. The new shock came at a time when global public debt was already near record highs.

Over the medium term, prospects for growth remain weighed down by structural challenges such as aging populations in much of the world—even without assuming additional shocks. But current supportive fiscal policies and private investment may help carry the economy through these difficulties, and potential productivity gains from AI hold the prospect of setting the world on a higher growth path.

The IMF is helping its members navigate these crosscurrents—to take advantage of opportunities and manage risks—through tailored policy advice, capacity development, and financing.