IMF says AI investment is propping up world growth while war and debt eat the buffers

The world economy is holding up better than the wars around it would suggest, and the International Monetary Fund says the reason is artificial intelligence. In its World Economic Outlook, released Tuesday as finance ministers and central bankers gathered in Bangkok for the IMF and World Bank annual meetings, the fund put global growth at 3.1 percent for 2026, up slightly from its July estimate, and 3.4 percent for 2027.

The fund's researchers said growth would have fallen to about 2.5 percent this year without the steps countries and companies took to absorb the oil shock from the war with Iran: drawing down strategic reserves, switching suppliers and cutting demand. Artificial intelligence investment did the rest, giving the economy a demand impulse even as energy prices stayed high. The IMF forecasts United States growth of 2.3 percent in both 2026 and 2027 on private consumption, tax cuts and AI spending, and raised its euro zone forecast for 2026 to 1.1 percent and Britain's to 1.3 percent.

The warning sits underneath the headline number. The buffers that absorbed the shock are running down. Global oil inventories are being drawn by about 2.7 million barrels a day, toward levels that could set off sharp price moves, and the fund's baseline assumes the Strait of Hormuz reopens in March 2027. Growth is also narrowing: 32 economies now produce 95 percent of global growth, down from 54 in April, and the fund has downgraded 47 percent of the economies it tracks since spring. A disorderly repricing of AI assets, the fund estimated, could cut United States output by 1.8 percent by 2028.

The war's home region takes the hardest hits in the forecast. Saudi Arabia is now expected to contract 3.3 percent this year, against growth of 1.7 percent predicted in July, and the fund projects deep recessions for Iran, Iraq, Kuwait, Qatar and the United Arab Emirates as well. Global inflation is forecast at 4.7 percent for 2026, easing to 4.1 percent next year. IMF chief economist Silvana Tenreyro told reporters in Bangkok that the economy's resilience is reaching its limits and that governments need to rebuild fiscal room while they still can. This report describes the fund's forecasts and the reaction to them; it is not investment advice.