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The International Monetary Fund on Tuesday slightly upgraded its outlook for the world economy for this year, while warning of growing risks from rising debt, including the financial frenzy around artificial intelligence.
The IMF says it expects the global economy to grow at a 3.1 per cent pace this year. That’s up from its July forecast for three per cent growth and well below the 3.5 per cent expansion in 2025. Growth in 2027 should rebound to 3.4 per cent, it said in its latest Economic Outlook.
The report, released as world economic and financial leaders gathered in Bangkok for the fall meetings of the IMF and World Bank, predicts that growth in the United States will remain steady at 2.3 per cent in 2026 and 2027.
Collectively, advanced economies will grow 2.1 per cent this year, up from two per cent in 2025, and then slow to 1.9 per cent growth next year, it said.
The forecasts are based on a nearly 41 per cent increase in oil prices this year, at an average of $96 US a barrel. The IMF foresees global inflation at 4.7 per cent in 2026, but expects price growth will fall to a pace of 4.1 per cent next year.
They are also based on the assumption that shipments of oil and gas through the Strait of Hormuz will resume by March, and that the boom in AI demand will moderate.
Uneven AI impacts
The boom in artificial intelligence is offsetting damage from sharply higher prices for oil and gas, IMF economists say. But the technology carries its own risks.
Its benefits are not shared equally — the U.S. and China account for more than three-quarters of net demand for imports of computer chips and other AI-related equipment, the report said.
“The outlook is highly uneven,” Silvana Tenreyro, the IMF’s director of research, told reporters in Bangkok.
Growth is increasingly concentrated, with 32 countries accounting for 95 per cent of global growth, the report said. That compares with 54 countries as of 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,” it says.
U.S. President Donald Trump is hosting a summit in Washington with the top leaders in AI development. Trump has dismissed warnings over artificial intelligence, arguing for the need to stay ahead of China in the AI arms race. Geoffrey Hinton, who is considered the ‘godfather’ of AI, says Trump ‘doesn’t really understand’ AI and is ‘ill-advised’ about it.
Athanasios Vamvakidis, deputy director at the IMF’s monetary and capital markets department, said an AI-related…
Read More: IMF warns of risks from AI boom and debt, but raises forecast for world
