The International Monetary Fund (IMF) has adjusted its global economic growth forecast for 2026 to 3.1%, a slight increase from its previous prediction of 3.0%. However, this remains below the 3.5% growth experienced in 2025. Looking ahead, the global economy is projected to expand by 3.4% in 2027.
The IMF attributes part of the economic resilience to investment in artificial intelligence (AI), which helps counterbalance the adverse effects of rising energy prices and geopolitical tensions. The United States and China are leading the demand for AI-related technology, accounting for over three-quarters of the global market for imported computer chips and related equipment.
Despite these positive developments, the IMF warns of potential risks to global financial stability. These include a correction in AI-related stock markets, increasing bond yields, mounting public debt, and cyber threats. Furthermore, the IMF highlights the potential impact of AI on employment, suggesting that around 40% of jobs worldwide could be affected in terms of tasks, quality, or employment levels.
Inflation is expected to reach 4.7% in 2026 but should ease to 4.1% by 2027. This forecast assumes that oil and gas shipments through the Strait of Hormuz will resume by March and that the demand for AI products will moderate.
In terms of individual economies, the United States is projected to grow by 2.3% in both 2026 and 2027. China’s economy is expected to expand by 4.5% this year, while India remains the fastest-growing major economy with a growth projection of 7% in 2026, down from 7.7% in 2025.
Emerging and developing economies are anticipated to grow by 3.7% in 2026, accelerating to 4.4% in 2027. However, the Middle East and Central Asia face challenges, with economic contraction expected this year before a recovery in 2027.
To navigate these challenges, the IMF advises governments to strengthen public finances and manage rising debt, especially as borrowing costs remain high and geopolitical uncertainties persist.