China · Bangkok Post
IMF says AI investment propping up global growth, but war and debt threaten outlook
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The global economy will still manage to top 3% real GDP growth this year as strong AI investment offsets the energy shock from the war in the Middle East, but downside risks are mounting and more countries are being left behind and vulnerable to rising debt loads, the International Monetary Fund said on Tuesday.
Key facts
- Despite a more protracted conflict that has kept oil prices above $100 a barrel, the IMF is forecasting 2026 global growth at 3.1%, a slight uptick from the 3.0% it predicted in July.
- The global economy will still manage to top 3% real GDP growth this year as strong AI investment offsets the energy shock from the war in the Middle East, but downside risks are mounting and more countries are being left behind and
- For 2027, the IMF predicts 3.4% global growth, flat with the July forecast and up 0.2 percentage point from April.
- Iran, Iraq, Kuwait, Qatar and the United Arab Emirates are also expected to fall into deep recessions, with 2026 contractions of 7.6%, 16%, 16.7%, 15.6% and 3.9%, respectively.
- Among major economies, the IMF forecast US growth of 2.3% for both 2026 and 2027, unchanged for this year and 0.1 percentage point higher for next year
- Euro zone growth for 2026 was upgraded to 1.1% from 0.9% in July due to stronger investment in AI, participation in AI value chains such as chemical production in Germany, and higher defence spending in EU countries
Summary
Despite a more protracted conflict that has kept oil prices above $100 a barrel, the IMF is forecasting 2026 global growth at 3.1%, a slight uptick from the 3.0% it predicted in July.
The World Economic Outlook forecast, released as global economic and finance leaders gather in Bangkok for the IMF and World Bank annual meetings, is about even with the most optimistic scenario issued in April but below 2025 global growth of 3.5%.