“For those countries that are most vulnerable, this is where the consumption basket is heavily weighted towards energy and food,” Petya Koeva Brooks, deputy director of the IMF Research Department, told AFP. “But unfortunately there is no other choice.” As the IMF mapped out global growth in Bangkok, its own account showed that low-income oil importers with little exposure to AI investment face the sharpest squeeze. Governments may have little room to shield people from higher costs.
Who Bears the Shock
The IMF forecast that developing economies and emerging markets would grow 3.7% in 2026, down from 4.5% in 2025, before recovering to 4.4% in 2027. It identified low-income developing countries that import net oil and aren't exposed to the AI technology investment boom as most vulnerable to shocks from the Iran war. Many heavily indebted oil-importing countries, Koeva Brooks said, faced difficult choices as they tried to help citizens through the energy shock.
“Unfortunately, after years of the global economy being hit by shock after shock, debt levels have increased quite a lot, and at the same time, inflation has become a problem,” she said. The IMF prescribed narrow, targeted subsidies, rebuilding fiscal buffers and addressing rising debt. For countries already in debt distress or close to it, the path runs between the cost of energy and food and the demands of creditors.
“Where debt is not sustainable, then resolving that debt and having orderly and timely restructuring is always better than waiting,” Koeva Brooks said, “because then the cost of restructuring down the road is going to be much higher.” The choices appear to involve national financial management. But the report describes households whose consumption is heavily weighted toward energy and food as bearing the hardest consequences.
Growth for Whom?
The IMF slightly upgraded its forecast for global economic growth in 2026 to 3.1%, from 3.0% in July, while saying growth would slow in 2027. The world economy expanded at an annual pace of 3.5% in 2025. Those totals conceal an increasingly concentrated distribution: 32 countries accounted for 95% of global growth, compared with 54 countries in April.
“The outlook is highly uneven,” Silvana Tenreyro, the IMF's director of research, told reporters in Bangkok. The report said growth was shifting according to countries’ exposure to the war-induced supply shock and AI-related demand. The United States and China accounted for more than three-quarters of net demand for imports of computer chips and other AI-related equipment. For countries outside that demand, the boom isn't a universal rescue.
The IMF forecast that advanced economies would grow 2.1% in 2026, up from 2.0% in 2025, then slow to 1.9% in 2027. The United States was expected to grow 2.3% in both 2026 and 2027, while the 21 countries that share the euro currency were forecast to grow 1.1% in 2026 and 1.2% in 2027. China was forecast to grow 4.5% in 2026, down from 5% in 2025 and in line with the government's official target. India was forecast to grow 7%, compared with 7.7% in 2025.
The Forecast's Fine Print
The IMF said AI investment was helping offset damage from sharply higher oil and gas prices. It expected oil prices to rise nearly 41% in 2026 to an average of $96 a barrel, lifting global inflation to 4.7%, from 4.1% in 2025. Those projections assume oil and gas shipments through the Strait of Hormuz resume by March and that AI demand moderates.
The institution also warned that the bet on AI could cut the other way. Managing Director Kristalina Georgieva described AI's employment effects as “a slow moving tsunami, but tsunami nonetheless,” estimating that around 40% of jobs globally would be augmented, downgraded or eliminated. In the IMF's worst-case scenario, if AI failed to deliver promised productivity gains, global GDP forecasts for 2028 would fall by as much as 0.4%.
The IMF released its outlook Tuesday, October 13, as economic and financial leaders gathered in Bangkok for the fall meetings of the IMF and World Bank. Finance ministers and central bank governors were set to assess the world economy and discuss financial stability and sustained growth. The institution's forecasts make the uneven costs plain: some economies capture the demand, while indebted oil importers confront choices about the price of keeping citizens supplied with essentials.