The International Monetary Fund (IMF) has updated its forecast for global economic growth, projecting a 3.1% increase for 2026, a slight rise from its earlier estimate of 3.0%. This projection, however, falls short of the 3.5% growth observed in 2025. The IMF anticipates a further expansion of the global economy by 3.4% in 2027.
The IMF identified investment in artificial intelligence (AI) as a key factor offsetting negative impacts from rising energy prices and ongoing geopolitical tensions. Nevertheless, the advantages of AI investment are not evenly spread, with the United States and China making up more than 75% of net demand for imported computer chips and AI-related technology.
Despite the positive outlook from AI investments, the IMF cautioned about several risks that could threaten global financial stability. These include a potential downturn in AI-related stock markets, increasing bond yields, growing public debt, and cyber threats. Additionally, the organization pointed out the transformative impact AI could have on the job market, estimating that around 40% of jobs worldwide might experience changes in tasks, job quality, or employment levels.
Inflation is expected to reach 4.7% in 2026, with a slight decrease to 4.1% projected for 2027. These forecasts are based on the assumption that oil and gas flows through the Strait of Hormuz will resume by March and that the demand for AI-related products will stabilize.
Among major economies, the United States is predicted to grow by 2.3% in both 2026 and 2027, while China’s economy is set to expand by 4.5% this year. India is projected to continue as the fastest-growing major economy, with an expected growth rate of 7% in 2026, slightly down from 7.7% in 2025.
Emerging and developing economies are anticipated to grow by 3.7% in 2026, accelerating to 4.4% in 2027. However, the Middle East and Central Asia face a tougher outlook, with economies expected to contract this year before recovering in 2027.
The IMF urged governments to focus on strengthening public finances and managing the rising debt levels, as borrowing costs remain high and geopolitical uncertainties loom over the global economic outlook.