The IMF now expects the global economy to grow at 3.1% in 2026, up from the 3% projection made in July, though slower than last year's 3.5% expansion. For 2027, the fund kept its forecast at 3.4%. The upgrade reflects an artificial intelligence-driven investment boom that has helped offset some impact from rising energy costs, but the international body warned that this resilience is reaching its limits. Silvana Tenreyro, the IMF's economic counsellor and director of research, told reporters that policymakers need to restore fiscal space and supply-chain security.
Growth is becoming increasingly concentrated among a smaller group of countries. Just 32 economies now account for 95% of global growth, down from 54 in April. Nations benefiting from artificial intelligence-related demand, such as Taiwan and South Korea, are expanding faster, while energy importers outside the technology supply chain face higher import bills and weaker real incomes. The euro zone is expected to grow just 1.1% this year, while the Middle East and Central Asia is projected to contract 0.3%. India remains the fastest-growing major economy, with the IMF forecasting 7.0% growth in both 2026 and 2027.
The IMF raised concerns about mounting public debt and the risks from artificial intelligence-related investment. Public debt in advanced economies is projected to reach 115% of GDP by 2031, compared with 108% in 2025. The fund warned that a potential reassessment of artificial intelligence profitability could trigger sharp corrections in equity markets and significantly slow global growth. The IMF estimated a 35% probability that global inflation will exceed 5% in 2027, up from 30% in April.