The International Monetary Fund projects global growth of 3.1% in 2026 and 3.4% in 2027, but warns the economy’s ability to withstand new shocks is under strain. Its outlook partly depends on technology investment concentrated among a small number of firms, sectors and economies, while higher energy and food prices have led the fund to raise its inflation forecasts.
The IMF kept its 2026 growth forecast unchanged from April and lifted its 2027 estimate by 0.2 percentage points. It expects the U.S. economy to grow 2.3% in both years, the fastest rate among G7 economies. For 2027, the fund raised its U.S. estimate by 0.2 percentage points.
Growth Depends on Concentrated Investment
IMF economic counselor Silvana Tenreyro warned that the current sources of growth also carry risks. “Without shoring up supply capacity and replenishing policy buffers, the global economy could soon test the limits of resilience,” she wrote in a blog post.
Tenreyro said technology investment had helped offset the energy shock, but also concentrated risk. “Technology-related investment, while an important boon against the energy shock, is concentrating risks — making the global expansion heavily reliant on a small number of firms, sectors, and economies,” she wrote.
A sharp reversal in the AI boom could leave global GDP 1.1% below its baseline forecast by 2028, the IMF estimates. The potential hit to U.S. GDP would be larger, at 1.8%. That scenario assumes AI’s promised productivity gains fail to materialize, prompting an investment pullback and a financial market correction.
The fund also described an upside scenario. Continued investment in AI, together with faster productivity gains, could lift global GDP 0.6% above its baseline forecast by 2029. The projections hinge on whether promised productivity improvements arrive and investment continues; the IMF’s figures describe possible outcomes, not certainty.
Energy Costs and Supply Risks
The IMF held to its global growth outlook despite prolonged energy disruptions from the Middle East war, while revising inflation higher. It expects global inflation to reach 4.7% in 2026 and ease to 4.1% in 2027. The fund raised both estimates from April as higher energy and food prices take a toll.
The world has weathered the energy shock partly by drawing down oil reserves and redirecting supplies. Oil stocks worldwide are falling by roughly 2.7 million barrels a day, the IMF says, increasing the risk of a sharp price spike.
Continued AI investment could also add to inflation and potentially prompt further interest rate hikes, the fund said. That risk comes alongside the possibility of an investment reversal, which could trigger a financial market correction and weaker output.
Officials Meet as Risks Accumulate
Global finance officials and central bankers gather in Bangkok this week for the IMF and World Bank’s annual meetings, with the forecasts as their backdrop. The IMF has underestimated global growth for three consecutive years, prompting questions about whether economies have become better at weathering shocks.
The fund cautions that resilience isn’t guaranteed against the next crisis. Its outlook centers on growth, inflation, oil supply, AI investment and financial-market exposure. It gives no figures on how projected growth or inflation would be distributed among workers or households, and sets out no demographic forecasts. The central warning is narrower: a global expansion supported by a concentrated technology boom and shrinking oil stocks remains vulnerable to shocks.