The International Monetary Fund raised its 2026 global growth forecast to 3.1% on October 13, from 3.0% in July, according to Reuters and AP. Its World Economic Outlook, released during the IMF and World Bank meetings in Bangkok, says investment in artificial intelligence is helping offset the economic damage from the Middle East war.
The fund expects growth of 3.4% in 2027, compared with 3.5% recorded in 2025, AP reported. The modest improvement for this year therefore leaves the world economy expanding more slowly than last year. The United States is projected to grow by 2.3% in both 2026 and 2027.
Reuters reported that the recovery depends on assumptions about energy supplies: the Strait of Hormuz reopening in March 2027 and shipping broadly returning to pre-war conditions by October 2027. The IMF assumes average oil prices of $96 a barrel this year and $87 next year. These are forecast assumptions, rather than confirmed developments.
AI investment supports activity, but also creates a potential source of financial disruption. Axios reported that an abrupt reversal of the boom could leave global output 1.1% below the IMF baseline by 2028, with a 1.8% shortfall in the United States. Those figures describe a downside scenario, not the central growth forecast.
The benefits are uneven. According to Reuters, the IMF lifted its 2026 euro area growth estimate to 1.1% from 0.9% in July, while cutting China's forecast to 4.5% from 4.6%. Higher oil costs add to China's weak domestic demand despite strong exports, the fund said.
The IMF also warned that high public debt could push borrowing costs sharply higher and weaken growth, Reuters reported. It urged governments to rebuild fiscal buffers and set credible medium-term debt plans. The outlook leaves officials in Bangkok weighing how to sustain activity while strengthening their ability to respond to another shock.
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