The IMF says the world economy is expected to grow 3.1% this year, while warning that rising debt and risks tied to artificial intelligence could worsen.
The Story
The International Monetary Fund on Tuesday slightly upgraded its outlook for world economic growth for this year, while warning that risks are building alongside rising debt and the financial frenzy around artificial intelligence, according to its latest Economic Outlook.
The IMF expects global growth of 3.1% this year, up from its July forecast of 3.0% growth and well below the 3.5% expansion it projected for 2025.
For 2027, the IMF forecasts a rebound to 3.4% growth.
The report was released as world economic and financial leaders gathered in Bangkok for the fall meetings of the IMF and World Bank.
The IMF predicts growth in the United States will remain steady at 2.3% in both 2026 and 2027.
Collectively, it says advanced economies will grow 2.1% this year, up from 2.0% in 2025, before slowing to 1.9% next year.
The forecasts are based on a nearly 41% increase in oil prices this year, averaging $96 a barrel, and on global inflation expected to be 4.7% in 2026 before falling to 4.1% in 2027.
The IMF also says its outlook assumes that shipments of oil and gas through the Strait of Hormuz will resume by March and that the boom in AI demand will moderate.
The IMF said the AI boom is offsetting damage from sharply higher oil and gas prices, while also warning that its benefits are not shared equally.
It said the United States and China account for more than three-quarters of net demand for imports of computer chips and other AI-related equipment, and that the outlook is “highly uneven,” with growth increasingly concentrated among a small number of countries.
The IMF said 32 countries account for 95% of global growth, compared with 54 countries as of April.
“The outlook is highly uneven,” IMF director of research Silvana Tenreyro told reporters in Bangkok, and the IMF said its report reflects how growth is being reallocated across countries based on exposure to supply shocks and AI-related demand strength.
The IMF and its economists also warned of risks beyond growth distribution, including a potential AI-related correction in stock markets, rising bond yields and cyberthreats that could disrupt financial systems.
The IMF pointed to sell-offs of AI-related shares that swept through Asia on Tuesday, saying South Korea’s Kospi fell as much as 7% before closing 5.5% lower.
The IMF also said the effects of AI on employment are another worry, with IMF Managing Director Kristalina Georgieva saying the impact over time on jobs globally is estimated to be around 40%, with jobs either augmented, downgraded or eliminated.
Debt remains a key concern in the IMF’s assessment, with Tenreyro urging countries to improve their national finances and tame mounting debt, especially during a period of high borrowing costs.
The IMF said developing economies and emerging markets more vulnerable to higher oil and gas costs are expected to see growth slow to 3.7% this year from 4.5% in 2025, before regaining momentum at 4.4% in 2027.
In the Middle East and Central Asia, the IMF forecast that economies will contract this year before recovering to 6.3% growth in 2027.
It projected that the 21 euro-currency countries will grow 1.1% this year and 1.2% in 2027, and forecast China’s growth at 4.5% in 2026, down from 5% in 2025.
The IMF also forecast India to be the world’s fastest-growing major economy, advancing 7% this year, down from 7.7% last year.
The IMF, a 191-nation lending organization that works to promote economic growth and financial stability and reduce global poverty, said finance ministers and central bank governors at the Bangkok meetings will assess the world economy and discuss strategies for sustained growth and stability.
← More stories