The International Monetary Fund (IMF) has slightly upgraded its forecast for global economic growth in 2026 while warning that rising debt, an artificial intelligence boom and geopolitical tensions pose risks to the world economy.
In its latest World Economic Outlook, released on Tuesday, the IMF projected global growth of 3.1% this year, up from its July forecast of 3%. However, the projected rate remains below the 3.5% expansion recorded in 2025.
The fund expects global growth to accelerate to 3.4% in 2027.
The report was released as finance ministers, central bank governors and other economic policymakers gathered in Bangkok for the IMF and World Bank's annual meetings.
The IMF forecasts that the US economy will grow by 2.3% in both 2026 and 2027. Advanced economies collectively are expected to expand by 2.1% this year, compared with 2% in 2025, before slowing to 1.9% in 2027.
The projections assume that oil prices will rise by nearly 41% this year to an average of $96 a barrel, shipments of oil and gas through the Strait of Hormuz will resume by March, and demand linked to artificial intelligence will moderate.
Global inflation is forecast to reach 4.7% in 2026 before easing to 4.1% next year.
AI boom brings opportunities and risks
The IMF said strong demand for artificial intelligence was helping offset some of the economic damage caused by sharply higher oil and gas prices. However, the benefits remain unevenly distributed and the boom carries financial risks.
The United States and China account for more than three-quarters of net global demand for imported computer chips and other AI-related equipment, according to the report.
“The outlook is highly uneven,” Silvana Tenreyro, the IMF's director of research, told reporters in Bangkok.
Economic growth is becoming increasingly concentrated in a smaller group of countries. The report said 32 countries now account for 95% of global growth, compared with 54 countries in April.
“The global economy is not simply slowing or accelerating; rather, growth is being reallocated across countries according to their exposure to the war-induced supply shock and AI-related demand strength,” the report said.
Athanasios Vamvakidis, deputy director of the IMF's Monetary and Capital Markets Department, identified a possible correction in AI-related stock valuations as one of the risks facing financial markets.
Rising bond yields and cyberthreats capable of disrupting financial systems are also concerns, he said.
The impact of artificial intelligence on employment has emerged as another major issue at the meetings. IMF Managing Director Kristalina Georgieva described the technology's effect on jobs as “a slow moving tsunami, but a tsunami nonetheless” during an event on Monday.
She estimated that around 40% of jobs worldwide could eventually be augmented, downgraded or eliminated by AI, adding that some effects were already becoming visible.
Rising debt adds to economic concerns
The IMF has also urged governments in both advanced and developing economies to strengthen their public finances as borrowing costs remain high and debt levels increase.
Tenreyro stressed the need for greater fiscal discipline amid mounting financial pressures.
Emerging markets and developing economies are expected to grow by 3.7% in 2026, down from 4.5% in 2025, as countries more exposed to higher oil and gas prices face mounting pressure. Growth in these economies is forecast to recover to 4.4% in 2027.
The outlook is particularly challenging for the Middle East and Central Asia, where economies are expected to contract this year before rebounding to a combined growth rate of 6.3% in 2027.
The 21 countries using the euro are projected to grow by 1.1% in 2026 and 1.2% in 2027.
China, the world's second-largest economy, is forecast to expand by 4.5% this year, down from 5% in 2025 and in line with the government's official target.
India is expected to remain the fastest-growing major economy, with projected growth of 7% in 2026, following an expansion of 7.7% last year.
At the meetings in Bangkok, finance ministers and central bank governors are expected to assess the global economic outlook and discuss measures to maintain financial stability and support sustainable growth.