Investing in AI boosts global growth : IMF

The International Monetary Fund (IMF) anticipates that the global economy will continue to grow at a pace of over 3% in real GDP this year. This projected growth is credited to substantial investment in artificial intelligence (AI), which is compensating for the energy crisis caused by the situation in the Middle East. However, the IMF has cautioned that the risks of downside growth are increasing, with more countries becoming isolated and susceptible to rising debt levels.

Despite oil prices staying above $100 a barrel, the IMF's forecast for global growth in 2026 is 3.1%, a marginal increase from the previously estimated 3.0% in July. The World Economic Outlook projection, presented as world economic and finance leaders convene in Bangkok for the IMF and World Bank annual meetings, is on par with the most optimistic scenario from April but falls short of the 3.5% growth rate projected for 2025.

For 2027, the IMF predicts a global growth rate of 3.4%, which remains unchanged from the July forecast and an uptick of 0.2 percentage points from the April projection. This modest improvement is mainly driven by continued strong investment in AI infrastructure, resulting in growth upgrades for leading advanced economies building AI platforms. Nations that supply AI hardware, such as South Korea, Malaysia, Mexico, and Thailand, which is currently hosting the annual meetings, are also experiencing growth enhancements.

Conversely, the IMF has downgraded the growth forecasts for 47% of economies since the April forecasts, including several energy-importing countries without AI value chains. Among major economies, the US is forecasted to have growth rates of 2.3% for both 2026 and 2027, an unchanged figure for this year but 0.1 percentage points higher for next year due to robust private consumption, tax cuts, and AI investment. The impact of AI growth is tempered by the large import component of the US economy.

The IMF assumes an average oil price of $96 per barrel for 2026 and $87 in 2027. However, under the adverse scenario outlined in the report, if escalating war pushes oil prices to $130 per barrel during the first quarter of 2027, growth would be diminished by 0.2 percentage points in 2026 and 0.5 percentage points in 2027. Additionally, inflation in 2027 is projected to rise by an additional 1.1 percentage points to 5.2%.