The International Monetary Fund (IMF) has raised its global economic growth forecast for 2026, as investment in artificial intelligence helps offset the impact of higher energy prices caused by the war in the Middle East. However, it warned that rising debt and a potential reversal in the AI boom threaten the outlook.
The IMF now expects the global economy to grow by 3.1% in 2026, up from its July forecast of 3.0%, according to its latest World Economic Outlook released on Tuesday in Bangkok. However, the projection remains below the 3.5% expansion recorded in 2025. The fund expects growth to accelerate to 3.4% in 2027.
The improved outlook reflects strong spending on AI infrastructure, including data centres, advanced chips and computing equipment. The investment has supported economic activity in the United States and China, as well as technology supply-chain economies such as South Korea, Malaysia, Mexico and Thailand.
The IMFalso warned that the benefits of the AI boom are unevenly distributed, leaving many countries vulnerable to rising energy costs without receiving a comparable boost from technology-related investment. Its report found that just 32 countries were expected to account for 95% of global economic growth, compared with 54 countries in its April assessment.
The fund also highlighted the risk of a sharp correction in AI-related financial markets if companies fail to generate sufficient returns from their substantial investments. Such a reversal could trigger losses across equity markets and expose financial institutions and investors to additional risks, particularly as borrowing costs remain elevated.
Rising government debt presents another challenge. The IMF urged countries to strengthen public finances and rebuild fiscal buffers, warning that heavy debt burdens could restrict governments’ ability to respond to future economic shocks.
Geopolitical tensions remain a major source of uncertainty. The conflict in the Middle East has pushed oil prices above $100 a barrel, increasing inflationary pressure and weighing on energy-importing economies. The IMF’s central forecast assumes that shipping through the Strait of Hormuz resumes by March 2027 and that global shipping conditions return to normal by October 2027. A prolonged conflict that keeps oil prices above $130 a barrel through the first quarter of 2027 could reduce global growth next year by half a percentage point, the fund said.
The United States is projected to grow by 2.3% in both 2026 and 2027, while China is expected to expand by 4.5% this year. India remains the fastest-growing major economy, with projected growth of 7%. Emerging and developing economies are forecast to grow by 3.7% in 2026, down from 4.5% last year, before recovering to 4.4% in 2027.
The IMF’s revised outlook underscores a global economy increasingly dependent on technology investment to sustain growth, even as geopolitical conflict, inflation and mounting debt create risks that could undermine the recovery.
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Emmanuel Abara Benson is a business journalist and editor covering artificial intelligence, global markets, and emerging technology.
He has previously worked with Business Insider Africa and Nairametrics, reporting on finance, startups, and innovation.
His work focuses on AI, digital economy, and global tech trends.
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