IMF raises its forecast for world growth this year but warns of risks
from AI boom and debt
[October 13, 2026] By
ELAINE KURTENBACH
BANGKOK (AP) — 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% pace this
year. That's up from its July forecast for 3.0% growth and well below
the 3.5% expansion in 2025. Growth in 2027 should rebound to 3.4%, 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% in 2026 and 2027.
Collectively, advanced economies will grow 2.1% this year, up from 2.0%
in 2025, and then slow to 1.9% growth next year, it said.
The forecasts are based on a nearly 41% increase in oil prices this
year, at an average of $96 a barrel. Global inflation is foreseen at
4.7% in 2026, falling to 4.1% next year. They also are 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.
AI has uneven impacts
The boom in artificial intelligence is offsetting damage from sharply
higher prices for oil and gas, IMF economists say, but it also carries
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% 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.
Athanasios Vamvakidis, deputy director at the IMF's Monetary and Capital
Markets Department, said an AI-related correction in stock markets is
just one of the risks. Rising bond yields are another evolving problem,
along with cyberthreats that could disrupt financial systems, he said.
Underscoring such concerns, sell-offs of AI-related shares swept through
Asia on Tuesday, with South Korea's Kospi sinking as much as 7% before
it closed 5.5% lower.
AI's effects on employment are another worry, “a slow moving tsunami,
but a tsunami nonetheless,” IMF Managing Director Kristalina Georgieva
said.
[to top of second column] |
The logo of the International Monetary Fund is visible on its
building, April 5, 2021, in Washington. (AP Photo/Andrew Harnik,
File)
 “The impact over time on jobs
globally we estimate to be around 40% — jobs either augmented or
downgraded or eliminated. And we are already seeing some of this
impact,” she said.
Debt remains a key concern for regional
economies
The IMF chief is urging countries to do a better job of improving
their national finances and taming mounting levels of debt.
That's especially crucial at a time of high borrowing costs,
Tenreyro said.
Countries that are somewhat insulated from the energy shocks of the
Iran war and that are benefiting from rapid adoption of AI are
managing to keep growth on track. But developing economies and
emerging markets more vulnerable to higher costs for oil and gas
will see growth slow to 3.7% this year from 4.5% in 2025, the report
says. It forecasts they will regain momentum next year, expanding at
a 4.4% annual pace.
The situation is much worse in the Middle East and Central Asia,
where those regions' economies are expected to contract this year
before recovering to a 6.3% rate of growth in 2027.
The 21 European countries that share the euro currency are expected
to grow by a meager 1.1% this year and 1.2% in 2027.
China, the world’s No. 2 economy, is expected to expand 4.5% this
year, down from 5% in 2025, in line with the government's official
target.
India is once again forecast to be the world’s fastest-growing major
economy, advancing at a 7% clip, down from a sizzling 7.7% last
year.
The IMF is a 191-nation lending organization that works to promote
economic growth and financial stability and to reduce global
poverty. At the meetings in Bangkok, finance ministers and central
bank governors will assess the state of the world economy and
discuss strategies to support financial stability and sustained
growth.
___
Associated Press journalists Haruka Nuga and Tian Macleod Ji
contributed.
All contents © copyright 2026 Associated Press. All rights reserved
 |
