IMF raises 2026 global growth forecast amid AI investment surge

Monday 19 January 2026 - 11:50

By: Dakir Madiha

IMF raises 2026 global growth forecast amid AI investment surge

The International Monetary Fund has upgraded its global growth projection for 2026 to 3.3 percent, crediting a surge in artificial intelligence investments and easing trade tensions for bolstering an economy showing unexpected resilience amid lingering political uncertainties. This marks a 0.2 percentage point increase from October estimates. IMF chief economist Pierre-Olivier Gourinchas highlighted the world's remarkable ability to withstand major U.S.-led trade disruptions and heightened uncertainty.

Key to this upward revision is the boom in technology spending, particularly on AI infrastructure. In the United States, information technology investments as a share of GDP have reached their highest level since 2001, delivering a significant boost to economic activity. While this tech-driven momentum is centered in North America, it creates positive spillovers worldwide, including stronger Asian exports of technology products. The U.S. economy now anticipates 2.4 percent growth this year, up 0.3 points from prior forecasts, fueled by fiscal policies, lower interest rates, and tech investments. China, the world's second-largest economy, sees its outlook lifted to 4.5 percent from 4.2 percent, aided by a trade truce that has reduced U.S. tariffs on Chinese goods to an effective rate of 18.5 percent, down from an expected 25 percent earlier.

Growth is expected to hold steady at 3.3 percent in 2025 before easing slightly to 3.2 percent in 2027. Despite the improved outlook, the IMF cautions that risks tilt downward. Overly optimistic expectations about AI-driven productivity gains could spark sharp stock market corrections, especially given the heavy reliance on a handful of major tech firms. Renewed trade conflicts, geopolitical strains, and high public debt levels pose additional threats to these projections.

The fund also issued a strong endorsement of central bank independence, a timely statement amid U.S. political pressures. It stressed that such autonomy is crucial for macroeconomic stability, preventing fiscal dominance, anchoring inflation expectations, and enabling banks to fulfill their mandates. IMF Managing Director Kristalina Georgieva recently noted substantial evidence that independent central banks benefit businesses and households alike. Globally, inflation is projected to ease further from 4.1 percent in 2025 to 3.8 percent in 2026, supported by falling energy prices.