The International Monetary Fund (IMF) has modestly increased its global growth forecast for 2026, citing resilience in the world economy as businesses adapt to easing U.S. tariffs and sustained investment in artificial intelligence (AI).
In its latest World Economic Outlook update, the IMF projects global GDP growth of 3.3% in 2026, up 0.2 percentage points from its October estimate, matching its revised 3.3% forecast for 2025. Growth in 2027 is expected to moderate slightly to 3.2%, unchanged from prior projections.
IMF Chief Economist Pierre-Olivier Gourinchas noted that the global economy has largely absorbed the trade disruptions of 2025, as companies reroute supply chains, trade agreements lower some tariffs, and China redirects exports toward non-U.S. markets. The IMF now assumes an effective U.S. tariff rate of 18.5%, down from around 25% projected earlier in 2025.
AI-related investment remains a key driver of growth, particularly in the United States, where the IMF raised its 2026 growth forecast to 2.4%, reflecting heavy spending on AI infrastructure such as data centers, advanced chips, and energy capacity. Technology investment has also supported upward revisions in Spain, while growth forecasts for the UK remain steady.
Despite the positive outlook, the IMF highlighted downside risks, including renewed trade tensions, geopolitical disruptions, and potential market corrections if expectations for AI-driven productivity gains fail to materialize. Rapid AI expansion could also pose inflationary pressures. A pending U.S. Supreme Court ruling on tariff authority could further increase trade policy uncertainty.
On the upside, the IMF estimates that successful AI adoption could lift global growth by up to 0.3 percentage points in 2026, with medium-term gains ranging from 0.1 to 0.8 percentage points annually, depending on adoption speed and readiness.
Regionally, China’s growth is forecast at 4.5% in 2026, supported by temporary tariff reductions and export diversification, though the IMF cautioned against overreliance on exports. The euro zone outlook improved slightly to 1.3%, driven by public spending and stronger performance in select member states. Japan also saw a minor upgrade due to fiscal stimulus, while Brazil’s forecast was downgraded to 1.6%, reflecting tighter monetary policy amid inflation concerns.
Global inflation is expected to continue easing, falling from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, providing scope for more accommodative monetary policy to support growth.
Source: https://www.reuters.com/business/imf-sees-steady-global-growth-2026-ai-boom-offsets-trade-headwinds-2026-01-19/