artificial intelligence economic growth

The International Monetary Fund has projected global economic growth at 3% for 2026, reflecting pressure from the Middle East conflict, elevated energy prices and persistent policy uncertainty. However, stronger investment and exports linked to artificial intelligence are partly offsetting the slowdown. IMF Cuts Global Growth Forecast for 2026 The IMF expects the global economy to expand by 3% in 2026 before growth improves to 3.4% in 2027. The 2026 projection represents a 0.1 percentage point reduction from the previous estimate. The downgrade reflects disruptions linked to the Middle East conflict, higher commodity costs and weaker activity in economies dependent on imported energy. Growth in advanced economies is forecast at 1.7% in 2026, while emerging market and developing economies are expected to expand by 3.8%. China Growth Forecast Raised to 4.6% China’s 2026 economic growth forecast was raised by 0.2 percentage points to 4.6%. The upgrade followed stronger-than-expected output in high-technology manufacturing, increased infrastructure investment and resilient export performance. However, the IMF warned that higher global oil prices, weak domestic consumption, structural challenges and continuing uncertainty could limit China’s growth. The economy is projected to expand by 4.1% in 2027. Global Inflation Expected to Rise Global headline inflation is projected to increase from 4.1% in 2025 to 4.7% in 2026 before easing to 3.9% in 2027. Higher energy, food, fertiliser and transportation costs are expected to drive the increase. Global trade volume growth is forecast to slow from 5% in 2025 to 3.5% in 2026. The IMF said artificial intelligence investment and technology-related trade could support economic activity, but renewed conflict, supply disruptions and financial-market volatility remain significant risks.

IMF Cuts Global Growth, Raises China Forecast

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