IMF Raises 2026 Global Growth Forecast as AI Investment Offsets Energy Shock

IMF Raises 2026 Global Growth Forecast as AI Investment Offsets Energy Shock

Bangkok meetings spotlight widening economic divide, rising debt and risks to global employment

Times Square Global Live | International Finance**
Updated October 13, 2026

BANGKOK, Thailand — The International Monetary Fund has slightly raised its global growth forecast for 2026, saying a powerful wave of investment in artificial intelligence is helping the world economy withstand high energy prices and mounting geopolitical pressures.

In its latest World Economic Outlook, released Tuesday during the IMF–World Bank Group Annual Meetings in Bangkok, the IMF projected global economic growth of 3.1% in 2026, up from its 3.0% forecast in July. Growth is expected to accelerate to 3.4% in 2027.

Global inflation, however, is projected to remain elevated at 4.7% in 2026, driven largely by higher energy and food prices, before easing to 4.1% next year.

“The global economy continues to prove resilient, but this resilience is becoming increasingly uneven,” the IMF said, warning that countries benefiting from the AI investment boom and favorable trade conditions are outperforming energy-importing and lower-income economies.

AI investment becomes a major pillar of global growth

The IMF said heavy spending on data centers, advanced computing systems and other AI infrastructure is supporting growth in major economies and across the global technology supply chain.

Countries supplying AI-related hardware—including South Korea, Malaysia, Mexico and Thailand—are among those benefiting from the investment surge. The United States is forecast to grow by 2.3% in both 2026 and 2027, supported by private consumption, tax reductions and AI investment.

The eurozone’s 2026 growth forecast was raised to 1.1%, while the United Kingdom’s forecast was upgraded to **1.3%**. China is projected to grow by 4.5% in 2026 and 4.0% in 2027. India is expected to remain the world’s fastest-growing major economy, expanding by 7.0% in both years.

But the benefits are becoming increasingly concentrated. According to the IMF, just 32 countries now account for 95% of global economic growth, compared with 54 countries in its April assessment. Nearly half of the economies covered by the IMF have received downward revisions since April.

This divergence has raised concerns that nations outside the AI supply chain—particularly developing countries already facing high borrowing and energy costs—could fall further behind.

IMF warns that global resilience is reaching its limits

Despite the improved headline forecast, IMF officials cautioned that the global economy remains vulnerable to multiple shocks.

The principal risks include a prolonged Middle East conflict, another surge in oil prices, rising government bond yields, extreme weather linked to El Niño and a potential reassessment of whether AI investment will deliver the productivity gains expected by financial markets.

The IMF’s baseline forecast assumes an average oil price of approximately $96 per barrel in 2026. Under a more severe scenario in which oil prices rise to $130 per barrel through early 2027, global growth could be reduced by 0.2 percentage point this year and 0.5 percentage point next year. Global inflation in 2027 could rise to 5.2%.

“The global economy has been resilient, but that resilience is reaching its limits,” IMF Chief Economist Silvana Tenreyro said, calling on governments to restore fiscal capacity and strengthen the resilience of supply chains.

AI brings opportunity—and major employment disruption

Artificial intelligence has emerged as one of the defining issues of this year’s Annual Meetings.

IMF Managing Director Kristalina Georgieva said AI investment is generating both a demand shock and an investment shock, helping maintain global growth despite the energy crisis. She also warned that AI could become a “slow-moving tsunami” for labor markets, education systems and government tax revenues.

IMF research suggests that approximately 40% of jobs worldwide could be augmented, downgraded or eliminated by artificial intelligence. In advanced economies, the share could reach 60%.

World Bank Group President Ajay Banga has emphasized a different opportunity: using smaller and less computationally intensive AI systems to raise productivity in agriculture, healthcare, education and small businesses across emerging markets.

The World Bank’s approach, described as “small AI,” is intended to create practical development benefits without requiring the enormous computing infrastructure used to train large global AI models.

Debt pressures move to the center of the policy debate

The IMF also warned governments against delaying action on public debt. Higher interest rates and rising bond yields are increasing borrowing costs at a time when many countries face growing demands for defense, healthcare, climate adaptation and social protection.

The IMF is urging governments to develop credible medium-term plans to rebuild fiscal buffers and place public debt on a sustainable path. The warning is particularly significant for lower-income and emerging economies, which often pay much higher interest rates and have less capacity to respond to new economic shocks.

Debt restructuring, development financing, fiscal transparency and private-sector investment will remain central issues throughout the Bangkok meetings.

Thailand hosts the meetings for the second time

The 2026 IMF–World Bank Group Annual Meetings are being held from October 12 through October 18 at the Queen Sirikit National Convention Center in Bangkok.

Financial leaders, policymakers, business executives, academics, civil-society representatives and media professionals from the institutions’ 191 member economies are participating in the weeklong gathering.

This is the second time Thailand has hosted the Annual Meetings, following the 1991 gathering 35 years ago. Thailand is using the occasion to highlight its digital payment infrastructure, cross-border QR payment systems, climate resilience programs, universal healthcare system and growing wellness economy.

The main events include the World Economic Outlook and Global Financial Stability Report briefings, the Development Committee meeting, the Annual Meetings plenary session and the International Monetary and Financial Committee meeting.

As discussions continue in Bangkok, the central question is no longer simply whether the global economy can withstand another shock. The deeper question is whether the benefits of technological transformation and economic growth can be shared widely enough to prevent a new era of global inequality.

Times Square Global Live will continue to follow the 2026 IMF–World Bank Group Annual Meetings and their implications for the global economy.