The World Economic Forum’s September 2026 Chief Economists’ Outlook and the International Monetary Fund’s October 2026 World Economic Outlook identify rising trade tariffs and persistent cost‑of‑living pressures as two of the five principal threats to global growth over the next twelve months.

The IMF now projects world GDP growth to slow to 3.1 % in 2026, down from 3.5 % in 2025, citing geopolitical tensions, energy‑market disruptions and trade uncertainty as key drag factors.

Governments are increasingly turning to tariffs to protect domestic industries and reduce reliance on foreign supplies, making trade restrictions a central concern for policymakers.

Reflecting tighter trade policies, the IMF forecasts global trade‑volume growth to ease to 2.6 % in 2026, a decline from 3.6 % in 2025.

High food, energy and transport costs accumulated over recent years have eroded household purchasing power, leaving many families struggling to meet essential expenses.

Lower‑income households are hit hardest because a larger share of their earnings goes toward basic necessities.

If cost‑of‑living pressures persist, governments may face heightened public discontent and be compelled to launch costly relief programmes.

Higher sovereign‑bond yields in major economies are raising borrowing costs, making it more expensive for governments – especially in developing nations – to fund infrastructure, social services and debt service.

For developing economies, the combination of trade disruptions and pricier financing collides with limited fiscal space, intensifying the challenge of sustaining growth while meeting rising public demands.