IMF Raises 2026 Global Growth Forecast to 3.1%, Warns on AI and Debt

By Olivia Hart

The International Monetary Fund on Tuesday raised its 2026 global growth forecast to 3.1%, up from its July estimate of 3.0% — while warning that a frothy artificial-intelligence boom and mounting public debt could undo the improvement. The new figure still trails 2025's 3.5% expansion, and the Fund sees growth rebounding only modestly, to 3.4%, in 2027.

The upgrade came with fine print. The forecasts assume oil prices average $96 a barrel this year — a near-41% jump — and that shipments through the Strait of Hormuz resume by March. They also assume AI demand cools from its current pace. Strip out those assumptions and the numbers lose their footing.

The IMF released the Economic Outlook as finance ministers and central bank governors gathered in Bangkok for the fall meetings of the IMF and World Bank. The United States is expected to hold steady at 2.3% growth in both 2026 and 2027. Advanced economies collectively will grow 2.1% this year, up from 2.0% in 2025, before slowing to 1.9% next year.

Global inflation is forecast at 4.7% in 2026, easing to 4.1% in 2027.

What does the AI boom change?

IMF economists credit the AI investment boom with offsetting damage from sharply higher oil and gas prices. But the benefits are narrow. The United States and China account for more than three-quarters of net demand for imports of computer chips and other AI-related equipment, the report said.

"The outlook is highly uneven," Silvana Tenreyro, the IMF's director of research, told reporters in Bangkok.

Growth is increasingly concentrated in fewer hands. Just 32 countries now account for 95% of global growth, down from 54 countries as of April. "The global economy is not simply slowing or accelerating; rather, growth is being reallocated across countries according to their exposure to the war-induced supply shock and AI-related demand strength," the report says.

The market risks are not hypothetical. Athanasios Vamvakidis, deputy director at the IMF's Monetary and Capital Markets Department, cited a possible AI-related correction in stock markets, rising bond yields and cyberthreats to financial systems. On Tuesday, sell-offs of AI-related shares swept through Asia; South Korea's Kospi sank as much as 7% before closing 5.5% lower.

The jobs picture is the Fund's starkest warning. IMF Managing Director Kristalina Georgieva called AI's effect on employment "a slow moving tsunami, but a tsunami nonetheless."

"The impact over time on jobs globally we estimate to be around 40% — jobs either augmented or downgraded or eliminated. And we are already seeing some of this impact," she said.

In plain terms: the IMF thinks AI will touch two in five jobs worldwide, and it is not betting the disruption stays orderly.

Why does debt dominate the Bangkok agenda?

Georgieva is pressing governments to repair national finances and tame rising debt, a task she called especially urgent now. Tenreyro reinforced the point, arguing that fiscal repair matters most at a time of high borrowing costs.

The divergence between winners and losers is stark in the regional numbers. Emerging markets and developing economies exposed to costlier oil and gas will slow to 3.7% growth this year from 4.5% in 2025, before recovering to 4.4% next year, the report says. The Middle East and Central Asia face outright contraction this year, with recovery to 6.3% growth expected only in 2027.

The 21-country eurozone is forecast to grow a meager 1.1% this year and 1.2% in 2027. China, the world's second-largest economy, is expected to expand 4.5%, down from 5% in 2025 — in line with Beijing's official target. India remains the fastest-growing major economy at 7%, cooling from 7.7% last year.

The IMF, a 191-nation lending organization, says its mandate in Bangkok is to assess the world economy and coordinate strategies for financial stability and sustained growth. Whether governments act on the debt warning, rather than merely discuss it, will determine if the 3.1% forecast holds.