The US economy is on track to expand at a rate of 2.3 percent in each of the next two years — 2026 and 2027 — according to IMF forecasts, with household spending and rising investment in artificial intelligence cited as the primary forces behind that outlook.

When the IMF released its October 2026 World Economic Outlook, the fund left its near-term expansion estimate for 2026 unchanged while lifting the 2027 growth projection by two-tenths of a percentage point above the level the April report had forecast. That forecast holds even as pressures from worldwide energy supply strains, unresolved trade disputes, and the continuing armed conflict in the Middle East weigh on conditions.

Four pillars — household spending, government fiscal measures, accommodating financial conditions, and ongoing investment in technology — underpinned the strength of US economic activity, according to the IMF's assessment. The fund also noted that the country's status as a net energy exporter provided a degree of protection against the price and supply disruptions that affected energy markets during that period.

Annualized expansion of the economy came in at 2.2 percent during the second quarter of 2026, easing back from the 2.5 percent pace recorded in the preceding three-month period. Gains in corporate investment, household spending, and export activity absorbed the drag from reduced government outlays and elevated import levels.

Consumer price inflation, as forecast by the IMF, is projected to climb from 2.7 percent in 2025 to 3.6 percent the following year, before easing back to 2.8 percent by 2027. Underlying price pressures are forecast to ease at a measured pace, converging on the 2 percent target somewhere around the middle of 2028.

The IMF also pointed to lingering weak spots in financial markets and public finances as areas that could weigh on the economy's overall resilience. Modelling by the fund placed the probability of US annual growth falling under the 1 percent threshold at around 30 percent for 2027, a scenario that would point to a mild contraction taking hold toward the end of 2026. Compared with the 35 percent figure put forward in April, the updated projection reflects a modest reduction in that level of risk.

A 30 percent chance that headline inflation could breach the 4 percent threshold by 2027 was also flagged in the report, marking a rise from the 20 percent likelihood recorded in the preceding assessment.

Outlays directed at semiconductors, data centres, power generation, and the broader infrastructure underpinning artificial intelligence have kept economic activity in the United States on a relatively steady footing, the report found, even as geopolitical pressures continued to weigh on the outlook. The IMF noted that the broader expansion has come to rest on a narrow cluster of technology firms and industries.

Under one hypothetical path examined by the fund, returns on artificial intelligence investments that fall short of expectations could set off a pullback across technology stocks and broader equity markets, with US share prices potentially retreating around 20 percent through 2026 — a contraction that, in turn, would constrain capital spending, tighten the availability of credit, and weigh on overall economic output. By 2028, one modelled projection places domestic output about 1.8 percent below established forecast baselines, a shortfall that analysts anticipate will carry measurable consequences for economies elsewhere around the world.

Warnings about fiscal vulnerabilities — among them a heavy public debt load, pressing financing demands, and climbing costs on long-term government bonds — also featured in the IMF's assessment. The fund found that addressing those weaknesses and taking pressure off borrowing costs would call for a credible fiscal strategy.