IMF 2026: fiscal revenues to narrow as governments seek ways to tackle price crisis

Growth Slows, Risks Rise

On October 13, 2026, the IMF published the World Economic Outlook. The forecasts are not good. Global growth will drop from 3.3% in 2025 to 3.1% in 2026, before slightly rebounding to 3.4% in 2027. Inflation will be 4.7% in 2026, then decrease to 4.1%.

Worse still, the IMF warns that risks outweigh gains. Further geopolitical tensions, new trade wars, and sudden government taxes — all of this is ahead. Energy-importing economies, outside the technology sector, will face the toughest period.

Price Subsidies Are Budget Drains

The IMF analyzed collapses in food and energy markets when governments froze prices. The finding was clear: subsidies cost governments 3 to 22 times more than direct cash support for the poorest.

Why? Subsidies create shortages of goods. They disappear without a trace on the black market. And when the government tries to withdraw the subsidy, a strike erupts. Direct transfers (e.g., food vouchers) work differently: taxpayers have money, the market adjusts prices, and everyone adapts faster.

Corporate Tax — Let It Be Complicated

Many countries are lowering corporate income tax, hoping for investments. The IMF says: it’s not that simple.

When the government finances tax cuts with debt (instead of cutting spending), the local economy jumps in the short term. But abroad, the effect is negative. Governments lose revenue, which limits public investment — especially in poorer countries. The solution: strengthen anti-avoidance regulations. Then tax revenues stay in the country, and foreign knowledge actually supports long-term growth.

Four Things That Must Change

The IMF has a prescription:

1. Save in good times. Government budgets have been growing faster than revenues. This needs to be reversed.
2. Central banks must be credible. Transparency and consistency prevent financial panics.
3. Invest in growth. Education, infrastructure, technology are not expenses, they are investments.
4. Collaborate, do not isolate. Self-imposed protectionism will hit everyone. International cooperation is needed.

Poland in the Risk Zone

Poland is not a wealthy economy — it relies on trade and energy from Germany. When Germany anticipates a slowdown, Polish production declines. Unemployment benefits rise. Taxes decrease.

The government will be between a rock and a hard place: protecting people from inflation while maintaining budget discipline. Article 33 of the labor code, benefits for the disabled — these will be battlefields.