The International Monetary Fund (IMF) warned on Tuesday that stubborn conflicts, high energy prices, and rapid technological disruptions are deepening the divide between economic winners and losers globally. Overall growth is forecast at 3.1% this year and 3.4% in 2027, but the average masks a reallocation of growth. Low-income countries dependent on oil imports and lacking competitive tech sectors face increased risk of widening income gaps.
Inflation is expected to rise to 4.7% this year and 4.1% next year, eroding household purchasing power. A prolonged conflict in the Middle East could further pressure inflation and slow growth, according to IMF Chief Economist Silvana Tenreyro. The World Economic Outlook was released during the annual IMF and World Bank meetings in Bangkok.
Ongoing shocks from the war in Ukraine, Middle East conflict, tariffs, and the collapse of international economic cooperation are straining governments. France’s protests reflect broader issues of public debt and fuel costs. Climate change, cyberattacks, and AI disruption add to global uncertainty.
The IMF recommends temporary, targeted assistance over overspending. The U.S. is projected to grow at 2.3%, while the euro area and Britain lag. China’s growth is slowing to 4.5%, while India leads at 7%.
Middle Eastern nations like Bahrain, Iraq, Kuwait, and Qatar face double-digit output drops due to oil trade interruptions.
Source: New York Times Top Stories · Summarized by HeadlinesBriefing