The International Monetary Fund (IMF) has increased its global economic growth forecast for 2026 to 3.1%, up from a previous estimate of 3.0%. Despite this upward revision, the projection remains lower than the 3.5% growth recorded in 2025. The IMF expects the global economy to expand further to 3.4% in 2027.
A key driver of this growth is investment in artificial intelligence (AI), which is helping to counterbalance the impact of higher energy prices and geopolitical tensions. However, the benefits are not evenly distributed, with the United States and China dominating the demand for AI-related imports, such as computer chips. This concentration poses potential risks to global financial stability, the IMF warns, as a correction in AI-related stock markets, rising bond yields, mounting public debt, and cyber threats could have significant consequences.
The IMF also raises concerns about AI’s impact on employment, estimating that around 40% of jobs worldwide could be affected through changes in tasks, job quality, or employment levels. This transformation in the job market underscores the importance of preparing the workforce for AI-driven changes.
In terms of inflation, global rates are projected to reach 4.7% in 2026 before easing to 4.1% in 2027. This forecast assumes an eventual resumption of oil and gas shipments through the Strait of Hormuz by March and a moderation in demand for AI-related products.
Examining major economies, the United States is expected to grow by 2.3% in both 2026 and 2027, while China’s economy is anticipated to expand by 4.5% this year. India is projected to be the fastest-growing major economy, with growth of 7% in 2026, although slightly down from 7.7% in 2025. Emerging and developing economies are forecasted to grow by 3.7% in 2026 and accelerate to 4.4% in 2027. However, the Middle East and Central Asia face challenges, with their economies expected to contract this year before recovering in 2027.
The IMF has urged governments to bolster public finances and manage rising debt levels as borrowing costs remain high and geopolitical uncertainties persist. These measures are crucial for maintaining stability in the global economic outlook, given the evolving risks and opportunities presented by technological advancements and shifting economic dynamics.
