The International Monetary Fund (IMF) has revised its global growth forecast for 2026, projecting a slight increase to 3.1% from the previous estimate of 3.0%. Despite this upward adjustment, the forecast remains lower than the 3.5% growth recorded in 2025, with expectations of 3.4% growth in 2027. This outlook comes with a cautionary note regarding potential economic risks associated with artificial intelligence (AI) and mounting global debt.
According to the IMF, while investment in AI is partially mitigating the adverse effects of higher energy prices and geopolitical tensions, the gains are not evenly distributed. The United States and China are leading the demand for imported computer chips and other AI-related equipment, representing over 75% of the global market. However, the IMF warns of the risk of a correction in AI-related stock markets, which, alongside rising bond yields, increasing public debt, and cyber threats, could destabilize global financial systems.
The potential impact of AI on the job market is another concern highlighted by the IMF. The organization estimates that AI could affect around 40% of jobs worldwide, altering tasks, job quality, and employment levels. This underscores the need for governments and businesses to prepare for shifts in the labor market as AI technology advances.
Global inflation is expected to hit 4.7% in 2026 before declining to 4.1% in 2027. This prediction assumes that oil and gas exports through the Strait of Hormuz will resume by March and that the current high demand for AI-related products will moderate. Among major economies, the United States is forecast to grow by 2.3% in both 2026 and 2027, while China’s economy is projected to expand by 4.5% this year. India is anticipated to lead major economies with a growth rate of 7% in 2026, despite a slight decrease from 7.7% in 2025.
Emerging and developing economies are expected to grow by 3.7% in 2026, with growth accelerating to 4.4% in 2027. However, the Middle East and Central Asia face a more challenging outlook, with economic contraction expected this year before a recovery in 2027. In light of these forecasts, the IMF has urged governments to bolster public finances and manage rising debts, as borrowing costs remain high amid ongoing geopolitical uncertainties.