The International Monetary Fund (IMF) has raised its global economic growth forecast for 2026 to 3.1%, a slight increase from its previous estimate of 3.0%. Despite this upward revision, the projection is still below the 3.5% growth recorded in 2025. Looking ahead, the global economy is anticipated to expand by 3.4% in 2027, according to the IMF’s latest World Economic Outlook.
While investment in artificial intelligence (AI) is helping to counterbalance the economic strains from higher energy prices and geopolitical tensions, the IMF cautions that the benefits of AI are not evenly distributed. The United States and China are leading the demand for imported computer chips and AI-related equipment, accounting for over three-quarters of the net demand, highlighting a disparity in global AI investment benefits.
The IMF warns that several risks could undermine global financial stability. These include a potential correction in AI-related stock markets, increasing bond yields, mounting public debt, and cyber threats. Additionally, the organization notes that AI could significantly impact employment, estimating that around 40% of jobs worldwide might be affected due to changes in tasks, job quality, or employment levels.
Global inflation is expected to reach 4.7% in 2026 before easing to 4.1% in 2027. This forecast is based on assumptions that oil and gas shipments through the Strait of Hormuz will resume by March and that the demand for AI-related products will level off.
Among major economies, the United States is projected to grow by 2.3% in both 2026 and 2027, while China’s economy is expected to expand by 4.5% this year. India is set to remain the fastest-growing major economy, with a growth rate of 7% in 2026, down from 7.7% in 2025.
Emerging and developing economies are forecast to grow by 3.7% in 2026, accelerating to 4.4% in 2027. However, the Middle East and Central Asia face a more challenging outlook, with their economies expected to contract this year before recovering in 2027.
The IMF urges governments to strengthen public finances and manage rising debt levels, as borrowing costs remain high and geopolitical uncertainties continue to influence the global economic landscape. These measures are considered crucial for maintaining economic stability amid the evolving risks.