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The International Monetary Fund has raised its 2026 global growth forecast to 3.1%, saying heavy investment in artificial intelligence is helping offset an energy shock — while warning that the benefits are increasingly concentrated and the world economy has little room for another major setback.
The forecast, released October 13 at the IMF–World Bank Annual Meetings in Bangkok, is one-tenth of a percentage point above the Fund’s July projection. It remains below the 3.5% global growth recorded in 2025. The IMF expects growth to reach 3.4% in 2027.
AI spending is supporting demand
Data centres, semiconductors, power equipment and other AI infrastructure are supporting investment in advanced economies and in major technology-supply hubs. The IMF highlighted South Korea, Malaysia, Mexico and Thailand among the countries benefiting from hardware demand.
But the recovery is narrow. The Fund said 32 economies now account for 95% of global growth, compared with 54 in its April assessment. That concentration makes the outlook more vulnerable if expectations for AI profits change abruptly.
Country forecasts
The IMF forecasts US growth of 2.3% in both 2026 and 2027. China is projected to grow 4.5% this year and 4.0% next year, both slightly below the Fund’s July forecasts, as high energy costs compound weak domestic demand. India remains the fastest-growing major economy in the report, with 7.0% growth forecast for both years.
The euro-area forecast for 2026 was raised to 1.1%, while the United Kingdom’s was lifted to 1.3%. Several Gulf economies received sharp downgrades because of the continuing Middle East conflict and energy-market disruption.
The forecast depends on important assumptions
The baseline assumes the Strait of Hormuz reopens in March 2027 and shipping conditions broadly normalise by October 2027. It assumes average oil prices of $96 a barrel in 2026 and $87 in 2027.
Under an adverse IMF scenario in which oil stays around $130 through the first quarter of 2027, global growth would be 0.5 percentage point lower next year and inflation 1.1 percentage points higher than the baseline.
What is known and what remains uncertain
The 3.1% number is a forecast, not a measured result. It incorporates current data and explicit assumptions about energy, conflict and investment. The largest uncertainties include the duration of the Middle East war, government borrowing costs, El Niño-related disruption and whether AI investment produces the productivity gains investors expect.
If the AI boom unwinds without sufficient productivity improvement, the IMF estimates global output could be 1.1% below its baseline by 2028, including a 1.8% impact on US output. A stronger and productive adoption cycle could instead raise world output.
Why it matters
For households and businesses, the report signals an economy still expanding but exposed to expensive credit and energy. For governments, the warning is that high debt has reduced the fiscal room available to cushion the next shock.
Sources
- IMF World Economic Outlook briefing, October 13, 2026
- Reuters, October 13, 2026
- Associated Press, October 13, 2026
