The International Monetary Fund (IMF) has projected a slowdown in global trade volume growth in 2026, warning that tariffs, changing production networks and geopolitical tensions could continue to weigh on international commerce despite the resilience of the world economy.
In its October 2026 World Economic Outlook, titled Resilience Under Strain, Urgent Choices, the Fund said world trade volume growth is expected to ease from 5.0 per cent in 2025 to 4.6 per cent in 2026 before stabilising at 4.7 per cent in 2027.
The projections reflect the combined effects of trade barriers, adjustments in global supply chains and sustained demand for technology-related goods and services. Editorial Standards
The outlook suggests that international trade will continue expanding, but at a slower pace than in the previous year. It also highlights the uneven nature of the global recovery, with some economies benefiting from technological investment while others face higher import costs, weaker demand and limited room to support domestic activity.
According to the IMF, the global economy has demonstrated resilience in the first half of 2026 despite the war in the Middle East and continuing uncertainty surrounding trade policies.
Businesses have adjusted to disruptions by rerouting shipments, changing suppliers and drawing on existing inventories to maintain production and deliveries.
However, the Fund cautioned that these adjustments cannot continue indefinitely without costs. Further disruptions, prolonged uncertainty and increasing fragmentation of international markets could weaken business confidence, reduce efficiency and place additional pressure on economic growth.
One of the major factors affecting the trade outlook is the continued use of tariffs. Higher trade barriers can increase the cost of imported goods, disrupt established commercial relationships and encourage businesses to reorganise their production networks.
Companies may respond by sourcing materials from alternative suppliers or relocating parts of their operations to different countries.
Although these adjustments can help businesses adapt to new conditions, they may also require additional investment and create short-term disruptions in established supply chains.
The IMF said the gradual reconfiguration of production chains is contributing to the changing pattern of global trade.
The effects are not uniform, as countries with competitive manufacturing sectors or strong connections to emerging technology industries may be better positioned to benefit from new trade flows.
Technology-related commerce is expected to provide an important source of support. Strong investment in artificial intelligence (AI) infrastructure has increased demand for semiconductors, computing equipment, data-centre components and other technology products.
This demand has helped sustain activity in parts of the global economy even as geopolitical tensions and trade restrictions create challenges elsewhere. Countries that manufacture or export technology-related products may benefit from increased investment and stronger international demand.
Nevertheless, the IMF warned that the gains are unevenly distributed. Economies with limited participation in technology supply chains may struggle to offset higher energy costs, weaker external demand and pressure on household purchasing power. Corrections Policy
The Fund also expects global economic growth to remain relatively modest. Its October outlook projects global output growth of 3.1 per cent in 2026, rising to 3.4 per cent in 2027.
Global headline inflation is projected to increase to 4.7 per cent in 2026 before easing to 4.1 per cent in 2027, partly reflecting higher energy and food prices.
These pressures could affect international trade by raising the cost of transporting goods, manufacturing products and financing business operations. Higher prices may also weaken consumer demand, particularly in countries where households are already facing pressure on their incomes.
For developing economies, including countries in Africa, slower trade growth could create challenges for export earnings, access to imported inputs and efforts to attract investment.
The actual impact will depend on each country’s export composition, exposure to energy prices, trading partners and ability to participate in expanding markets.
African economies that rely heavily on a narrow range of commodity exports may be particularly vulnerable to fluctuations in global demand and prices. Strengthening regional trade, improving transport infrastructure and expanding local processing could help countries build more resilient economic relationships.
The African Continental Free Trade Area offers a framework for increasing trade among African countries, although its benefits will depend on implementation, reduced non-tariff barriers, efficient customs procedures and improved connectivity between markets.
The IMF also warned that global economic risks remain tilted towards weaker outcomes. A prolonged conflict in the Middle East could keep energy and food prices elevated, while renewed trade tensions could further disrupt supply chains and undermine confidence.
A sharp reassessment of expectations surrounding AI investment could also weaken technology-related demand, affecting economies and businesses that have benefited from the current investment cycle.
Despite these risks, the projected stabilisation of trade growth in 2027 indicates that international commerce is expected to remain a source of economic activity.
However, the outlook will depend on how governments manage trade disputes, how businesses adapt to changing conditions and whether geopolitical tensions ease.
The IMF’s assessment underscores the need for policymakers to strengthen economic resilience, maintain stable policy frameworks and deepen international cooperation. Newscard
For businesses and governments alike, the challenge will be to navigate a changing trade environment while preserving the benefits of cross-border commerce.
Although global trade is expected to continue growing, the Fund’s projections suggest that its future performance will depend increasingly on how economies respond to tariffs, technological change and persistent geopolitical uncertainty.