IMF raises global growth forecast to 3.1% as AI spending cushions the war shock

The International Monetary Fund raised its 2026 global growth forecast to 3.1% from 3.0%, crediting AI investment with helping the economy withstand higher energy costs and war. Its outlook, released at the annual meetings in Bangkok and covered by CNBC, carries a warning: the spending supporting demand now is also adding inflation and financial risks.

The revision is an improvement on July’s estimate, not a return to faster expansion. Growth is still expected to slow from 3.5% in 2025. The IMF left its 2027 forecast unchanged at 3.4%, while warning that the cushions helping economies absorb disruption are narrowing.

The boost comes from building, not yet broad efficiency gains

AI-related investment helped economic activity in the first half of 2026 hold up better than expected, the IMF said. Spending provided an immediate lift to demand despite the Middle East war and trade tensions. Fiscal support also helped underpin the stronger-than-expected performance.

The fund describes the AI buildout as a large, front-loaded demand shock: money is pouring into semiconductors, data centers and power generation before broad productivity gains have materialized. The near-term contribution is therefore the investment itself, rather than a demonstrated economy-wide improvement in how efficiently work gets done.

That sequencing creates a tradeoff. The IMF says AI spending is also adding inflationary pressure. It maintained its global inflation forecast at 4.7% for 2026 and raised the 2027 estimate to 4.1% from July’s 3.9%. Price growth is expected to ease, but less than previously projected.

Hardware suppliers gain as growth narrows

The stronger headline forecast conceals a more concentrated expansion. Thirty-two economies now account for 95% of global growth, down from 54 in April. Countries serving AI-related demand and facing limited exposure to the war’s supply disruption are holding up or strengthening, according to the fund.

• Taiwan: The IMF forecasts 10.7% growth in 2026, with semiconductor demand supporting the expansion.
• South Korea: Growth is projected at 3.3%, up from 1.1% in 2025, also supported by semiconductor demand.
• United States: The fund expects 2.3% growth in both 2026 and 2027, supported by consumption, fiscal policy and technology investment.

Energy importers outside the technology supply chain face higher import bills, weaker real incomes and less room for government spending. The euro zone is forecast to grow just 1.1% this year amid higher energy costs and weak consumer confidence. The Middle East and Central Asia is projected to contract 0.3%.

Energy shortages could undercut the AI cushion

The outlook assumes the Strait of Hormuz will reopen in March 2027, with conditions returning to their pre-war state by October. Those are IMF projections. Meanwhile, economies have diversified fuel sources and tapped strategic reserves to contain the energy-market turmoil, but those buffers cannot absorb disruption indefinitely.

Global oil reserves are being drawn down by about 2.7 million barrels a day, nearing levels that could trigger sharp price moves, the IMF said. It warned that energy constraints could impair the AI-led momentum—the same investment activity that has helped offset the war’s economic damage.

There is also a risk that investors reassess AI’s profitability and productivity prospects. In the IMF’s downside scenario, where productivity gains fail to materialize, U.S. equities could fall 20%. That is a modeled risk, not its baseline forecast; weaker expectations could also cause excessive investment to pull back.

The fund’s policy advice remains cautious despite the growth upgrade. Research director Silvana Tenreyro urged sufficiently restrictive monetary policy to bring inflation back to target. The IMF also called for governments to rebuild fiscal room and keep assistance for households facing higher food and energy costs temporary and targeted.