KUALA LUMPUR: However, the revised forecast remains below the 3.5 percent growth recorded last year, highlighting continued challenges facing the global economy.
In its World Economic Outlook report released on Tuesday, the IMF maintained its global growth projection for 2027 at 3.4 percent, unchanged from its July estimate. The forecast is 0.2 percentage points higher than the projection issued in April.
The report was released as the IMF and World Bank hold their annual meetings in Bangkok, Thailand.
The IMF attributed the modest improvement in the global outlook partly to sustained investment in artificial intelligence infrastructure, which has helped cushion the effects of rising energy prices and supported growth prospects in several advanced economies and countries integrated into technology supply chains.
South Korea, Malaysia, Mexico and Thailand are among the economies benefiting from increased demand for devices and components used in AI development, while advanced economies are gaining from the development of AI platforms and supporting infrastructure.
However, the IMF warned that the benefits of the AI investment boom are unevenly distributed, widening the gap between economies benefiting from the expansion and those largely excluded from it.
According to the report, just 32 economies now account for about 95 percent of global economic growth, compared with 54 economies in the IMF’s April estimates.
The fund also noted that downward revisions to growth forecasts have become more widespread, with projections lowered for about 47 percent of economies since April. These include several energy-importing countries that have limited exposure to AI-related supply chains.
Global headline inflation is projected to reach 4.7 percent in 2026 before easing to 4.1 percent in 2027, according to the IMF. The fund pointed to continued upward pressure on prices associated with the expansion of AI-related investment.
The IMF also warned that rising public debt, particularly in advanced economies, could trigger sharp increases in borrowing costs and undermine economic growth amid persistent financial and geopolitical uncertainty.
The IMF called on governments “not to postpone the necessary actions to rebuild reserves and fiscal buffers that will enable them to cope with future crises, while putting in place credible medium-term plans to bring public debt back to sustainable levels.”