The International Monetary Fund (IMF) has warned that global inflation is expected to rise to 4.7% in 2026, an increase from 4.1% in 2025, based on its most recent report. This rise in inflation, or the general increase in prices for goods and services, is attributed to a series of economic challenges, such as wars and pandemics, which have kept product prices high, especially for essential items like food and energy. The report points out that the Covid-19 pandemic had already caused major disruptions in the supply chains that deliver goods around the world, while the war in Ukraine mainly affected the production and availability of food and fuels. More recently, the war in Iran, which began in February 2026, has added to these pressures. The report suggests that these ongoing conflicts and crises are likely to push global inflation to 4.7% by 2026. This increase in prices affects all members of society, from businesses to families, as wages are not rising fast enough to match the cost of living. As a result, people's purchasing power—the amount of goods and services they can buy with their income—is decreasing. The IMF emphasizes that the poorest households are hit the hardest, as they spend a larger share of their income on essentials, which can lead to higher poverty rates in many countries. The IMF states that the current rise in prices is having a real and "significant" effect on increasing poverty and income inequality. These economic shocks will continue to have long-term effects, making it harder for governments to manage their populations' needs and for central banks to control inflation. To combat rising prices, central banks like the European Central Bank have raised interest rates, which can slow down economic activity by making loans more expensive and reducing consumer spending. However, finding the right balance between controlling inflation and maintaining economic growth is especially challenging for developing countries. In response to these challenges, the IMF urges countries to focus on targeted and temporary support measures, avoiding broad subsidies that can be costly and inefficient. However, many countries are already dealing with high levels of debt, which limits their ability to take action. The IMF warns that this situation could lead to a "very dangerous infernal spiral" that will have lasting consequences for the global economy.