IMF Raises Global Growth Forecast as AI Investment Offsets War Risks
The International Monetary Fund (IMF) has raised its global economic growth forecast for 2026 to 3.1%, up from 3.0% projected in July, as strong investment in artificial intelligence (AI) helps offset the impact of the ongoing Middle East conflict and rising energy prices. The IMF expects global growth to reach 3.4% in 2027, although the outlook remains below the 3.5% growth recorded in 2025.
The IMF projects the US economy to grow by 2.3% in both 2026 and 2027, while China’s growth is expected to slow to 4.5% and 4.0%, respectively. India remains the fastest-growing major economy, with growth forecast at 7% for both years, supported by strong domestic demand, services activity and AI investment. However, several Gulf economies, including Saudi Arabia, Qatar, Kuwait and the United Arab Emirates, face significant economic contractions due to the war’s impact on energy markets and regional activity.
The IMF warned that a prolonged conflict, higher oil prices, rising government borrowing costs and growing public debt could threaten global economic stability. It also highlighted uncertainty surrounding AI investment, cautioning that disappointing productivity gains could trigger falling asset prices and weaker global growth. The fund urged governments to strengthen financial safeguards and develop credible plans to manage debt as economic risks continue to increase.
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