The International Monetary Fund's Tuesday outlook pegged worldwide growth at 3.1% through 2026, noting that capital flowing into artificial intelligence infrastructure was expected to help offset the drag from unresolved conflict in the Middle East and energy prices that have remained elevated. The lender added that headwinds to the global outlook have grown, pointing to heavier debt loads across economies and a pattern of growth that has become less evenly shared.

Timed to coincide with the IMF and World Bank annual meetings under way in Bangkok, the fund's updated World Economic Outlook raised its forecast for global growth in 2026 to a figure above the 3.0% projection issued in July. The number landed below the 3.5% expansion recorded in 2025, though it fell within the band the fund had identified as favourable when it published its April projections.

Global growth in 2027 is projected at 3.4% — holding at the same rate pencilled in during July, though landing two-tenths of a point higher than the spring outlook had called for. Ongoing investment in AI infrastructure has been identified as a principal driver behind the uptick, channelling growth toward advanced economies building out AI platforms as well as the nations providing the hardware those systems depend on.

Among the nations represented in that group are South Korea, Malaysia, Mexico, and Thailand — the country currently hosting the gatherings taking place this week.

In its assessment of worldwide economic conditions, the IMF indicated that the capacity for sustained recovery may be narrowing as the ongoing energy disruption continues to bear down on output. Petya Koeva Brooks, who holds a deputy research directorship at the fund, explained to a broadcast outlet that an early buffer against the oil price shock had come through tapping reserves, broadening the mix of suppliers and energy sources, and pulling back on overall consumption.

Those measures, she noted, had kept global growth from dropping to 2.5% in the current year, though their impact was fading as the conflict dragged on.

A widening gap in global recovery rates drew attention in the IMF's assessment, with nations connected to artificial intelligence investment and technology supply networks pulling ahead of those yet to gain meaningful access to either. The fund's projection now places just 32 nations at the centre of nearly all global expansion — a pool less than two-thirds the size of the 54 countries it had identified in April.

Revised outlooks for nearly half of all tracked economies — a group that includes multiple energy-importing nations sitting outside AI supply chains — have been pulled lower relative to what April's projections had anticipated. Downward adjustments to growth forecasts across the Gulf have been among the steepest recorded, tied to disruptions in energy output and broader economic activity stemming from the ongoing conflict.

Revised projections now put Saudi Arabia's economy on track to shrink by 3.3% through 2026 — a swing from the 1.7% growth that forecasters had pencilled in as of July. Forecast figures point to output losses of 7.6% for Iran, while neighbouring economies face steeper declines — Iraq and Kuwait each heading toward roughly 16% and 16.7% respectively, with Qatar's output set to fall by around 15.6%. Projections place the UAE's economy on a path toward a 3.9% contraction.

An extended or intensified conflict, the IMF noted, carries the potential to squeeze energy supplies, push inflation higher, and drag down economic output across the region and into neighbouring economies.

For the United States, the IMF held its 2026 growth estimate steady at 2.3% while nudging the 2027 outlook upward by a tenth of a percentage point, placing it among the forecasts reviewed across leading economies. Household spending, fiscal relief through tax reductions, and capital flowing into artificial intelligence are all forecast to underpin the American economy, though the degree to which AI-linked investment translates into domestic output may be tempered by how much of that spending draws on imported goods.

Projections for eurozone output in 2026 have been lifted to 1.1%, up from the 0.9% figure published in July, with analysts pointing to a pickup in AI-linked capital expenditure, broader participation in technology supply chains, and a step-up in defence outlays across EU member states. Forecasters lifted their outlook for Britain's 2026 expansion by 0.3 percentage points, bringing the projected rate to 1.3%, with anticipated artificial intelligence investment cited as a key driver behind the revision.

Forecasts place growth in the world's second-largest economy at 4.5% for 2026 and 4.0% for 2027, each trimmed by a tenth of a percentage point from where July projections had them. Elevated energy costs are projected to weigh on already-subdued consumer activity at home, though a resilient export performance has continued to offset some of that pressure, according to broadcast reporting.

According to IMF projections, output across the Indian economy is set to expand at 7.0% in each of 2026 and 2027, a pace that outstrips every other large economy tracked in the forecasts. Compared with the figures released in July, the 2026 outlook has moved up by 0.6 percentage points and the 2027 figure by 0.3 percentage points. Consumer expenditure holding steady, a services industry posting consistent growth, and investment channelled toward artificial intelligence together form the structural base on which India's economic momentum rests, even as conditions beyond its borders stay uncertain.

Worldwide consumer prices, as tracked by the IMF, were forecast to run at 4.7% in 2026 and then ease back to 4.1% the following year. Ongoing pressure from energy prices, combined with sustained appetite for investment, risks slowing the path toward lower inflation, the fund noted.

Under those baseline projections, the Strait of Hormuz is expected to become navigable again by March 2027, with shipping patterns across the region returning to their pre-war state around seven months later, in October of that year. According to the IMF's working projections, crude oil is expected to average around $96 a barrel through 2026 before easing to roughly $87 the following year.

In a more strained environment where hostilities escalate and crude oil climbs to $130 a barrel through the opening quarter of 2027, worldwide economic expansion would trail baseline projections by 0.2 percentage points in 2026 and by a further 0.5 percentage points in 2027. A projected 1.1-percentage-point climb would push inflation to 5.2% by 2027, heaping fresh strain on central banks and pushing back the timeline for any easing of borrowing costs.

In its assessment, the IMF placed artificial intelligence on both sides of the ledger — a technology capable of driving economic growth while also carrying the potential to weigh on broader financial stability. Quicker uptake and a stepped-up flow of investment could add roughly 0.6% to worldwide economic output by 2029, with the two largest economies forecast to draw the greatest share of those gains.

Shifting views on whether AI delivers the returns investors expect — combined with productivity gains that fall short of forecasts — could weigh on spending, asset valuations, and broader economic activity. In a stress-test projection extending to 2028, American gross domestic product faces a direct contraction of around 0.8 percentage points, with knock-on effects across Asian technology-exporting economies potentially trimming their collective output by up to 0.4 percentage points over the same horizon.

Declining asset values and tighter credit conditions carry the potential to weigh on what households can afford to spend, with the United States among the economies where that dynamic may be felt most acutely. According to IMF projections, an uptick in global bond yields would compound those pressures, with the two forces together forecast to trim worldwide output by 1.1% and US output by 1.8% through to 2028.

High levels of government debt — especially in wealthier nations — expose public finances to the prospect of abrupt rises in the cost of borrowing, the fund noted in its advisory. Borrowing costs at elevated levels can put pressure on a government's ability to service its debt, narrow the room available for fiscal manoeuvre, and act as a drag on broader economic activity.

Among the actions the IMF urged governments to pursue were rebuilding budgetary buffers and laying out clear, multi-year plans for managing debt levels, rather than putting off the tougher decisions on public spending and revenue.

Gathered at the IMF and World Bank sessions in Bangkok, policymakers are set to address those concerns as they weigh how economies can be made more durable against a backdrop of geopolitical instability, turbulence in energy markets, and mounting financial pressures.