The International Monetary Fund's World Economic Outlook update, which was released on Wednesday, projected global growth at 3 percent this year, down from an average of 3.5 percent between 2024 and 2025, with a few economies, including China, emerging as bright spots.
The negative impact of the United States and Israel's war with Iran on global supply chains and the rapid and positive deployment of artificial intelligence tools worldwide are the two biggest factors shaping global economic activity across countries, the IMF report said.
It projected China's growth at 4.6 percent for 2026, which is 0.2 percentage points higher than its April forecast. That growth is "driven by front-loaded public infrastructure investment and a surge in high-tech manufacturing and in exports, even as domestic consumption remained soft".
The IMF expected global growth to be around 3.4 percent in 2027.
The report noted that it was too early to judge the full impact of the war on supply chains and manufacturing purchasing managers' indexes, as it pointed to softer momentum ahead.
