Key facts
- The IMF warns renewed Middle East conflict is the most immediate risk to global growth and inflation.
- The IMF lowered its 2026 global growth forecast to 3.0% and expects 3.4% in 2027.
- Global headline inflation is forecast to rise to 4.7% in 2026.
- Kenya's economy is projected to grow 4.3% in 2026 and 4.4% in 2027, according to the World Bank.
- Higher energy prices and uncertainty from the Middle East conflict could push up to 2.4 million Kenyans below the poverty line.
The International Monetary Fund (IMF) has warned that renewed conflict in the Middle East poses the most immediate risk to global growth and inflation, potentially worsening food insecurity. The fund lowered its 2026 global growth forecast to 3.0% and expects a rebound to 3.4% in 2027. Headline inflation is forecast to rise to 4.7% in 2026.
Meanwhile, Kenya's economy is expected to expand 4.3% this year and 4.4% in 2027, according to the World Bank, a downward revision from previous predictions. The bank cited higher global energy prices and increased uncertainty stemming from the Middle East conflict as factors that will raise production costs, weaken private investment, and reduce household purchasing power in Kenya. The after-effects of the conflict could push the poverty rate up by 2 to 4.5 percentage points, potentially affecting 1 million to 2.4 million Kenyans.
Global economic leaders have noted the economy's resilience to the Middle East war's shock, though uncertainty and impacts could linger. The World Bank also highlighted climate-related shocks and political uncertainty related to Kenya's upcoming 2027 general elections as downside risks. In late June, the World Bank approved a $750 million budget-support loan and a $500 million sustainability-linked facility for Kenya.