The International Monetary Fund has lowered its global economic growth forecast for 2026 to 3 percent, citing weaker trade activity and uncertainty surrounding tariffs and geopolitical tensions.

The organisation expects global trade growth to slow sharply this year before recovering in 2027.

The IMF said economies that are heavily dependent on commodity imports and those that have not fully benefited from artificial intelligence investments face greater economic challenges.

Meanwhile, some energy-exporting countries and technology-driven economies have received improved forecasts.

Global businesses are becoming increasingly cautious about investment decisions because of concerns surrounding trade restrictions and slowing consumer demand.

Companies are also preparing for potential disruptions in supply chains and international commerce.

Economists say the world economy remains resilient despite ongoing conflicts and market volatility.

However, they warn that geopolitical tensions and protectionist policies could continue to limit growth in the near term.

The IMF expects economic activity to improve in 2027 if trade conditions stabilize and technological investments continue supporting productivity and business expansion.

Source: Reuters, IMF