The International Monetary Fund (IMF) has updated its global economic outlook, projecting a modest increase in growth for 2026. The organization now forecasts a growth rate of 3.1%, slightly up from the earlier estimate of 3.0%, although still trailing the 3.5% growth seen in 2025. The IMF anticipates further expansion in 2027, with a growth rate of 3.4%.
In its report, the IMF credits investment in artificial intelligence (AI) as a factor counterbalancing the adverse effects of higher energy prices and geopolitical tensions. However, the benefits of AI investments are not evenly distributed, with the United States and China dominating demand for imported computer chips and other AI-related technologies.
The IMF cautions that the global economy faces potential risks, including a possible correction in AI-related stock markets, rising bond yields, increasing public debt, and cyber threats. The organization also notes the significant impact AI could have on employment, estimating that about 40% of jobs worldwide could be affected in terms of tasks, job quality, or employment levels.
Inflation is expected to remain a concern, with global inflation projected to reach 4.7% in 2026 before easing to 4.1% in 2027. This outlook assumes a resumption of oil and gas shipments through the Strait of Hormuz by March and a moderation in demand for AI-related products.
Among the world’s major economies, the United States is forecasted to grow by 2.3% in both 2026 and 2027. China’s economy is expected to expand by 4.5% this year, while India is projected to outpace other major economies with a 7% growth rate in 2026, down from 7.7% in 2025.
Emerging and developing economies are expected to see growth rates of 3.7% in 2026, accelerating to 4.4% in 2027. Conversely, the Middle East and Central Asia face a challenging economic landscape, with contractions anticipated this year before a recovery in 2027.
The IMF urges governments to bolster public finances and manage rising debt levels, especially as borrowing costs remain high and geopolitical uncertainties continue to influence the global economic environment.