The International Monetary Fund (IMF) has updated its global economic growth forecast, projecting a 3.1% increase for 2026, a slight rise from the earlier estimate of 3.0%. This revised forecast, however, falls short of the 3.5% growth experienced in 2025, while the global economy is expected to expand by 3.4% in 2027.
Investment in artificial intelligence (AI) plays a significant role in mitigating the adverse effects of high energy prices and geopolitical tensions, according to the IMF. Yet, the benefits of AI investment are not evenly spread, with the United States and China accounting for the majority of the demand for imported computer chips and AI-related equipment.
The IMF has highlighted several potential risks to global financial stability, including a possible correction in AI-related stock markets, increasing bond yields, rising public debt, and cyber threats. Moreover, the organization pointed out the potential impact of AI on employment, suggesting that around 40% of jobs worldwide could be affected due to changes in tasks, job quality, or employment levels.
Inflation is projected to reach 4.7% in 2026, before easing to 4.1% in 2027. This forecast assumes the resumption of oil and gas shipments through the Strait of Hormuz by March and anticipates a moderation in demand for AI-related products.
Among major economies, the United States is expected to grow by 2.3% in both 2026 and 2027. China’s economy is projected to expand by 4.5% this year, while India remains the fastest-growing major economy with an expected growth of 7% in 2026, down from 7.7% in 2025.
Emerging and developing economies are forecasted to grow by 3.7% in 2026, with an acceleration to 4.4% in 2027. Meanwhile, the Middle East and Central Asia face a challenging outlook, with their economies expected to contract this year before recovering in 2027.
The IMF has urged governments to reinforce public finances and manage rising debt levels amid elevated borrowing costs and persistent geopolitical uncertainties that continue to impact the global economic landscape.