The IMF world growth forecast was nudged higher on Tuesday, with the International Monetary Fund now projecting global expansion of 3.1% this year, up from its July estimate of 3.0%, even as it warns momentum will wane by 2027.
The update, released in Bangkok as finance ministers and central bank leaders meet alongside the World Bank, depicts a mixed picture. A surge in artificial intelligence investment is helping counter the drag from sharply higher oil and gas prices, the IMF said.
IMF world growth forecast highlights
The report notes that the global economy grew 3.5% in 2025. It now expects crude prices to average $96 a barrel this year, nearly 41% higher, pushing global inflation to 4.7% in 2026 compared with 4.1% last year.
Growth in advanced economies is seen edging up to 2.1% this year from 2.0% in 2025, then slipping to 1.9% next year.
In the United States, growth is projected to hold steady at 2.3% in 2026 and 2027. The 21 countries using the euro are expected to expand 1.1% this year and 1.2% in 2027.
China is forecast to grow 4.5% this year, down from 5% in 2025, while India remains the fastest-growing major economy at 7% after 7.7% last year.
AI boom offsets energy shock, but unevenly
The IMF said the AI boom is cushioning the blow from higher energy costs, though its benefits are concentrated. The United States and China account for more than three-quarters of net demand for imports of chips and other AI-related gear.
“The outlook is highly uneven,” IMF research director Silvana Tenreyro said in Bangkok. The report finds growth is increasingly concentrated, with 32 countries now generating 95% of global growth, compared with 54 in April.
IMF Managing Director Kristalina Georgieva described AI’s labor effects as “a slow moving tsunami,” estimating about 40% of jobs globally will be augmented, downgraded or eliminated over time.
The fund has urged countries to strengthen public finances as high debt and borrowing costs raise risks to financial stability.
Regional and market outlooks
Emerging markets more exposed to costly energy are set to slow to 3.7% this year from 4.5% in 2025, before regaining pace to 4.4% next year, the IMF said. The Middle East and Central Asia are expected to contract this year, then rebound to 6.3% growth in 2027.
The projections assume oil and gas shipments through the Strait of Hormuz resume by March and that AI-related demand moderates. Countries relatively shielded from the Iran war’s energy shocks and adopting AI rapidly are keeping growth on track, the report said.
The IMF, a 191-member institution focused on global financial stability and poverty reduction, is convening in Bangkok with policymakers to assess risks and strategies for sustaining growth.
For Hawaiʻi’s trade-dependent economy, shifts in global growth, oil prices and inflation can quickly filter through to import costs, visitor markets and local business conditions.
