The International Monetary Fund (IMF) has warned that the global economy could soon struggle to absorb further economic shocks, as emergency oil reserves decline and government debt continues to rise. 

The warning came alongside the IMF’s latest World Economic Outlook, released on October 13, 2026, which slightly raised its global growth forecast for this year while highlighting growing risks from geopolitical tensions, higher energy prices and stretched public finances. 

The IMF now expects the global economy to grow by 3.1% in 2026, up from its earlier estimate of 3.0% in July. It has maintained its forecast of 3.4% growth for 2027. However, the revised outlook remains below the 3.5% growth recorded in 2025.

The IMF said economic activity had held up better than expected despite the conflict in the Middle East and disruptions to energy supplies. Strong investment in artificial intelligence (AI) has supported growth in several advanced economies, helping offset some of the pressure from higher oil prices. 

One of the IMF’s main concerns is that countries have fewer emergency resources available to manage another major disruption. Strategic oil stockpiles have declined following energy supply shocks, while higher borrowing costs and rising public debt have reduced governments’ ability to provide financial support.

A further escalation in the Middle East could push energy prices higher, increase inflation and weaken consumer spending. Businesses could also face higher operating costs, while central banks may find it harder to reduce interest rates.

The IMF raised its UK economic growth forecast for 2026 to 1.3%, from 1.0% in July. However, it expects growth to ease to 1.2% in 2027 as elevated energy prices and long-term interest rates weigh on consumption and investment. It also expects UK inflation to average 3.3% in 2026. 

The IMF’s outlook points to a global economy that remains resilient but increasingly vulnerable. Governments may need to rebuild financial reserves, manage borrowing carefully and provide targeted support rather than broad subsidies.

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