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The International Monetary Fund (IMF) projects that the global economy will expand to USD 124 trillion by 2026, signaling moderate growth in a world increasingly shaped by protectionism, geopolitical fragmentation, and policy uncertainty.
In its October 2025 World Economic Outlook (WEO) report, the IMF underscored that growth momentum is weakening across major economies, citing headwinds such as tech-sector repricing, trade restrictions, and eroding institutional independence that could constrain effective policymaking.
Global output is forecast to slow from 3.3% in 2024 to 3.2% in 2025, before easing further to 3.1% in 2026.
- Advanced economies are expected to post modest growth averaging around 1.5%, reflecting tighter financial conditions and constrained fiscal space.
- Emerging markets and developing economies are projected to grow at a faster pace—slightly above 4%—driven by higher investment, youthful demographics, and stronger domestic demand.
The IMF attributes this widening growth gap to differences in fiscal capacity, investment potential, and demographic trends across regions.
Inflation Dynamics: Gradual Easing but Persistent Divergences
While global inflationary pressures are expected to continue declining, the pace of disinflation will vary by region.
- In the United States, inflation is likely to remain above the Federal Reserve’s target, sustained by resilient consumer demand and tight labor markets.
- In contrast, Europe and parts of Asia may see more subdued price increases, supported by softer domestic demand and easing energy costs.
Africa’s Rising Economic Influence
Africa is increasingly recognized as a key player in global economic realignment, not only due to its abundant natural resources but also its strategic role in shifting trade and investment flows.
The IMF projects that Africa’s combined GDP will reach approximately USD 3.32 trillion in 2026, reflecting steady foreign investment and a continued post-pandemic recovery.
Investment activity on the continent has surged:
- During the first half of 2025, China signed USD 30.5 billion worth of construction contracts with African nations, nearly five times the value recorded in the same period of 2024.
- Major projects include railway networks in Nigeria and port developments in Egypt, according to research from Griffith University and the Green Finance & Development Center.
- Additional investment flows from Europe, the Middle East, and Asia are expected, as countries seek to diversify supply chains and secure new trade corridors.
Risks and Structural Challenges
Despite its promising trajectory, Africa faces enduring structural barriers that could constrain long-term growth.
- The African Development Bank (AfDB) estimates an annual infrastructure financing gap of USD 108 billion, highlighting the urgent need for investment in transport, energy, and digital networks.
- Other persistent challenges include policy and regulatory uncertainty, skills shortages, high youth unemployment, and rising sovereign debt levels.
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https://trendsnafrica.com/imf-raises-growth-prospects-of-sub-saharan-africa/
According to IMF projections for 2026, the continent’s ten largest economies by GDP are expected to be:
1.South Africa USD 443.64 bn
- Egypt USD 399.51bn
3.Nigeria USD 334.34 bn
4.Algeria USD 284.98bn
5.Morocco USD 196.12 bn
- Kenya USD 140.87 bn
- Ethiopia USD 125.75 bn
- Ghana USD 113.49 bn
- Ivory Coast USD 111.45 bn
- 10.Angola USD 109.86 bn
These economies collectively account for a substantial share of Africa’s total output, underscoring their central role in shaping the continent’s economic trajectory.
