IMF projects global economic growth of 3.1% in 2026 and 3.4% in 2027

Bangkok: The International Monetary Fund (IMF) has projected global economic growth of 3.1 percent during 2026, compared with its July estimates of 3 percent, despite the ongoing conflict in the Middle East and rising energy costs, and at a rate lower than the growth recorded last year of 3.5 percent.This came in the World Economic Outlook report issued today, coinciding with the annual meetings of the Fund and the World Bank being held in the Thai capital, Bangkok. The Fund projected global economic growth of 3.4 percent during 2027, unchanged from July estimates and up 0.2 percentage points compared with the forecasts issued last April.It attributed the slight improvement in growth forecasts to continued strong investments in artificial intelligence infrastructure, which helped offset part of the negative effects of rising energy prices and drove an improvement in growth estimates for a number of advanced economies and countries participating in technology production chains.It noted that South Korea, Malaysia, Mexico and Thailand have benefited from rising demand for devices and components used in developing artificial intelligence technologies, alongside advanced economies that develop platforms and infrastructure for this technology.It also noted the widening gap between economies benefiting from artificial intelligence investments and countries that have not benefited from this boom, as only 32 countries have come to contribute about 95 percent of global economic growth, compared with 54 countries in April estimates.It explained that downward revisions to growth forecasts "have become more widespread," having lowered its estimates for about 47 percent of economies since the April forecasts were issued, including a number of energy-importing countries that do not participate in value chains linked to artificial intelligence.With regard to global inflation, the Fund projected that the headline consumer price rate will reach 4.7 percent during 2026 before declining to 4.1 percent in 2027, with upward pressures on prices linked to the investment boom in artificial intelligence persisting.On the public finance file, it warned that rising levels of public debt, particularly in advanced economies, increase the risks of sharp jumps in borrowing costs and threaten to weaken economic growth amid continued financial and geopolitical volatility.The IMF called on governments to "not postpone the necessary measures to rebuild reserves and fiscal buffers that enable them to confront future crises, while putting in place credible medium-term plans to return public debt to sustainable levels."