IMF Maintains 2027 Global Growth Forecast at 3.4% Amid Rising Risks

The International Monetary Fund (IMF) maintained its 2027 global economic growth forecast at 3.4%, warning that escalating Middle East tensions, rising government debt and persistent inflation could threaten the global economy.

In its latest World Economic Outlook, released during the IMF and World Bank annual meetings in Bangkok, the fund raised its 2026 global growth projection to 3.1%, up from 3.0% in July. However, the revised estimate remains below the 3.5% expansion recorded in 2025.

The IMF attributed the improved outlook partly to strong artificial intelligence (AI) investment, which has helped economies withstand higher energy prices and geopolitical uncertainty.

Spending on AI infrastructure has supported advanced economies and major technology suppliers, including South Korea, Malaysia, Mexico and Thailand. The United States and China account for more than 75% of global net import demand for semiconductors and other AI-related equipment.

However, economic growth is becoming increasingly concentrated. The IMF estimates that just 32 countries will contribute 95% of global expansion, compared with 54 countries projected in April. Meanwhile, 47% of economies have experienced downward forecast revisions.

Energy disruptions remain another significant concern. The IMF expects oil prices to average $96 per barrel in 2026, representing an increase of nearly 41%, before declining to $87 in 2027.

Its baseline forecast assumes shipping through the Strait of Hormuz resumes in March 2027, with conditions largely returning to normal by October.

Under a more severe scenario, oil prices reaching $130 per barrel through the first quarter of 2027 could reduce global growth by 0.2 percentage point in 2026 and 0.5 point in 2027.

Global inflation is projected to reach 4.7% in 2026 before easing to 4.1% in 2027, although prolonged energy disruptions could push next year's inflation to 5.2%.

The IMF also cautioned that disappointing AI investment returns could trigger financial market corrections. Conversely, faster AI adoption could boost global GDP by 0.6% by 2029.

IMF Managing Director Kristalina Georgieva warned that AI could affect approximately 40% of jobs worldwide.

With elevated public debt and borrowing costs restricting governments' ability to respond to economic shocks, the IMF urged policymakers to strengthen fiscal reserves, stabilize debt and carefully manage inflation risks.