IMF chief says global inflation will fall to 3.8%

Global inflation is expected to fall to 3.8% this year and to 3.4% in 2027, helped by softer demand and lower energy prices, the IMF chief said on Monday.

Managing Director Kristalina Georgieva said in a speech at the Annual Arab Fiscal Forum in Dubai that global growth has held up "remarkably well" amid profound shifts in geopolitics, trade policy, technology and demographics.

Georgieva also called for more trade integration as unilateral trade agreements are seen on the increase. "In the world of trade fragmentation, more trade integration is absolutely paramount."

"What we have seen this year is that trade did not go down the way we feared it would. In fact trade is growing slightly slower than global growth," she added.

Georgieva said Arab economies were expected to grow by 3.7%, driven by increased oil production and the continued recovery of non-oil sectors, reflecting improved regional economic performance despite global challenges.

In her opening address at the Arab Fiscal Forum, she noted that the global economy was projected to grow by around 3.2% this year, exceeding previous expectations, supported by stronger global demand and easing financial pressures in several major economies.