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The International Monetary Fund has raised its forecast for global economic growth in 2026 to 3.1 percent, up from the 3.0 percent projected in July, according to the fund’s latest World Economic Outlook released during its annual meetings in Bangkok. Global growth slowed from 3.5 percent in 2025 and is seen rebounding to an unchanged 3.4 percent in 2027, the IMF reported. The assessment assumes the Strait of Hormuz reopens by March 2027 with conditions returning toward pre-conflict levels by October of that year.
According to the IMF, the upgrade reflects robust artificial intelligence-related exports from economies such as South Korea and Taiwan that are generating positive spillover effects for other manufacturing-oriented countries in Asia including Japan, Malaysia, Singapore and Thailand. The report noted that capital goods tied to AI are largely sourced from these Asian nations. Growth is becoming more concentrated with only 32 economies now accounting for 95 percent of global expansion compared with 54 in April, IMF data shows.
IMF figures place global headline inflation at 4.7 percent in 2026 before easing to 4.1 percent in 2027, driven by higher energy costs linked to the regional conflict and the AI investment boom. Oil prices are projected to average $96 a barrel this year, nearly 41 percent higher than last year, according to the outlook. Energy-importing economies outside technology value chains face the most difficult conditions in a bifurcated global landscape, the fund stated.
The United States is forecast to expand 2.3 percent in both 2026 and 2027 supported by private consumption, fiscal policy and technology investment, the IMF reported. China’s growth is projected at 4.5 percent in 2026 and 4.0 percent in 2027, both trimmed by 0.1 percentage point. Euro area growth stands at 1.1 percent this year and 1.2 percent next while the United Kingdom forecast rose to 1.3 percent for 2026, according to the assessment.
Advanced economies overall are seen growing 2.1 percent in 2026, an upward revision of 0.4 percentage points from the July update, IMF data places. Emerging and developing economies are projected to slow to 3.7 percent this year before recovering to 4.4 percent in 2027. The Middle East and Central Asia region faces contraction of 0.3 percent in 2026 before rebounding strongly, the fund’s regional breakdown shows.
Silvana Tenreyro, the IMF’s chief economist, told journalists that the global economy has been resilient but that resilience is under strain with risks skewed to the downside. She highlighted depleting inventories, high debt levels and overstretched budgets as factors limiting further adjustment. The report urged governments to tighten fiscal policy and build buffers through revenue measures to handle future shocks.
Roughly 47 percent of economies saw downgrades in the latest projections while growth concentration underscores a reallocation based on exposure to war-induced energy shocks versus AI-related demand strength, according to the IMF. The fund warned that further escalation in conflicts, reassessment of AI expectations or renewed trade tensions could weaken outcomes. Stronger AI productivity gains or eased geopolitical strains present upside risks, the outlook concluded.
