IMF forecasts decline in global oil prices in 2027

The International Monetary Fund (IMF) expects the average price of Brent crude to decline from a projected $96 per barrel in 2026 to $86 per barrel in 2027, Roberto Cardarelli, Division Chief of the South America II Division in the IMF’s Western Hemisphere Department, and the mission chief for Argentina, said.

He made the remarks during the presentation of the regional economic outlook report "Caucasus and Central Asia Steering Through Uncertainty".

Cardarelli said the figures were not based on the Fund's own oil price forecasts, but on market expectations reflected in futures contract prices.

"We assume that the war in the Middle East will come to an end. Regardless of how events actually unfold, we continue to assume that oil prices will decline next year," Cardarelli said.

He explained that this assumption was based on the expected normalization of energy trade through the Strait of Hormuz and the Persian Gulf.

As for food prices, the IMF expects upward pressure to persist due to fertilizer shortages, the El Niño phenomenon and climate change. However, the Fund anticipates that price increases will be moderate compared to previous periods.

The forecasts also factor in some interest rate increases by the US Federal Reserve, as well as in the euro area and Japan.

Cardarelli emphasized that the IMF's assumptions regarding oil and food prices, as well as interest rates, were relatively favorable.

Based on these assumptions, the Fund expects global economic growth to reach around 3 percent in 2026 and 3.5 percent in 2027. The IMF also projects a gradual slowdown in inflation following its increase this year, although the decline may be somewhat slower than anticipated in July.

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