AI investment props up global growth, but war and debt threaten outlook, IMF says
SPY•The IMF raised its 2026 global growth forecast to 3.1% from 3.0%, citing strong AI investment despite the energy shock from war. It forecast 3.4% growth in 2027 and warned that prolonged conflict, debt and AI-related risks could weaken the outlook.
1. Growth outlook improves slightly
The IMF forecast global growth of 3.1% in 2026, up from its July forecast of 3.0%, and 3.4% in 2027. Strong investment in AI infrastructure helped lift forecasts for economies building AI platforms and supplying AI hardware.
2. Forecasts vary by country
The IMF forecast US growth of 2.3% in both 2026 and 2027. China’s forecasts fell to 4.5% for 2026 and 4.0% for 2027, while India’s were 7.0% for both years. The IMF forecast Saudi Arabia’s economy to contract 3.3% in 2026, compared with a July forecast of 1.7% growth.
3. Risks include war and AI
The IMF warned that prolonged conflict, higher bond yields, extreme weather and a reassessment of AI profitability could weigh on growth. In an adverse scenario with oil at $130 a barrel through the first quarter of 2027, global growth would be 0.2 percentage point lower in 2026 and 0.5 point lower in 2027.
