In its 2026 G20 Report on Strong, Sustainable, Balanced and Inclusive Growth, the IMF said economic activity has withstood a series of shocks, including increased trade restrictions and the war in the Middle East. However, medium-term growth prospects across G20 economies remain subdued at around 3%, close to the weakest levels since the growth framework was launched in 2009.
The report said easing financial conditions and advances in artificial intelligence have supported economic activity, but productivity growth continues to be constrained by excessive regulation, labour-market rigidities, weak governance, underdeveloped capital markets and inadequate policy responses to demographic change.
The IMF found that about half of G20 advanced economies and nearly three-quarters of G20 emerging market economies face growth impediments linked to excessive labour-market, consumer and product-market regulations.
For Africa, the findings highlight the importance of governance reforms and stronger economic institutions. The IMF identified fiscal reforms, monetary and financial sector reforms and governance improvements as key priorities for the continent’s largest economies, including Egypt, Ethiopia, Ghana, Kenya, Nigeria and South Africa.
According to the report, many African economies would benefit from stronger tax administration, improved public financial management, enhanced fiscal transparency and tougher anti-corruption measures. The IMF also recommended deeper domestic bond markets and stronger monetary policy frameworks to improve economic resilience and support investment.
The Fund warned that rising public debt remains a significant challenge globally. Higher interest rates and borrowing costs are placing increasing pressure on public finances, prompting calls for additional fiscal consolidation across much of the G20. “Additional fiscal consolidation is recommended in most G20 economies to rebuild fiscal buffers and safeguard fiscal sustainability,” the report said.
The IMF also noted that global current account imbalances are widening again. While some deficits have narrowed, the United States continues to run the world’s largest current account deficit, while surpluses in China have expanded.
Looking ahead, the IMF said structural reforms offer the best path to stronger long-term growth. Reforms aimed at improving business regulations, strengthening governance, enhancing labour-market flexibility and deepening financial markets could boost productivity, investment and economic resilience.
The report concluded that implementing recommended reforms would help countries achieve stronger growth, lower debt burdens and more balanced external positions, while greater international cooperation could reduce uncertainty and help manage cross-border economic risks.
–IMF/ChannelAfrica–
