IMF says AI investment is propping up global growth, but war and debt threaten outlook
SPY•The IMF raised its 2026 global growth forecast to 3.1% from 3.0%, citing strong AI investment even as war, rising debt and other risks threaten the outlook. It forecasts U.S. growth of 2.3% in both 2026 and 2027.
1. Growth outlook improves slightly
The IMF forecast global growth of 3.1% in 2026, up from its July estimate of 3.0%, as investment in AI infrastructure offsets some of the energy shock from the Middle East conflict. It expects growth of 3.4% in 2027, unchanged from July, and said growth would have been 2.5% this year without measures to mitigate the oil-price shock.
2. Uneven country forecasts
The IMF forecast U.S. growth of 2.3% in both 2026 and 2027. It raised its 2026 euro zone forecast to 1.1% and Britain’s to 1.3%, while lowering China’s forecasts to 4.5% in 2026 and 4.0% in 2027. Saudi Arabia’s economy is now forecast to contract 3.3% in 2026, compared with a July forecast for 1.7% growth.
3. Risks to growth and inflation
The IMF warned that a prolonged conflict, weaker-than-expected returns on AI investment, extreme weather and worsening fiscal prospects could weaken growth. In an adverse scenario with oil at $130 a barrel through the first quarter of 2027, growth would be 0.2 percentage point lower in 2026 and 0.5 point lower in 2027, while 2027 inflation would reach 5.2%.
