IMF lifts 2026 growth forecast but flags diverging global outlook

The International Monetary Fund raised its 2026 global growth forecast to 3.1 per cent, a modest 0.1 percentage point increase from its previous estimate. However, the forecast remains considerably lower than the anticipated 3.5 per cent expansion expected in 2025, signalling a gradual deceleration in worldwide economic activity.

The revised outlook was unveiled at the IMF's annual meeting held in Bangkok, where Fund officials presented a detailed assessment of global economic trajectories. The upgrade reflects marginal improvements in certain sectors and regions, yet the overall picture underscores persistent uncertainties and uneven momentum across the global economy.

The IMF's characterisation of a "split" outlook highlights the divergence between advanced and emerging market economies. Different regions face distinct challenges ranging from policy adjustments to structural headwinds, contributing to the fragmented growth landscape anticipated through 2026.

For Malaysia and other Southeast Asian economies, the IMF's assessment carries implications for trade, investment flows, and domestic policy calibration. The regional outlook will depend significantly on how major trading partners navigate their respective growth trajectories and the effectiveness of domestic policy responses to external pressures.

The Fund's cautiously optimistic revision suggests the global economy is stabilising, yet policymakers across all economies remain advised to prepare for a slower expansion compared to 2025 performance.