7 hours agoAI boom helps keep global economy afloat despite war and debt, IMF warns
The global economy is getting a major boost from the artificial intelligence investment boom, helping offset the economic fallout from the war in the Middle East, but the International Monetary Fund warns that a downturn in AI spending could threaten future growth.
The IMF on Tuesday raised its forecast for global economic growth to 3.1% in 2026, up from 3.0% in July, citing strong investment in AI infrastructure as a key driver of the improved outlook, Reuters reported.
The U.S. economy is projected to grow 2.3% this year, supported by consumer spending, tax cuts and AI investment.
But the IMF cautioned that the technology boom also poses risks. If anticipated AI productivity gains fail to materialize, triggering a pullback in investment and financial-market turmoil, global economic output could fall 1.1% below its baseline forecast by 2028, with U.S. output declining 1.8%.
“The global economy has been resilient, but that resilience is reaching its limits, so we need to move from just coping to rebuilding,” IMF chief economist Silvana Tenreyro told reporters.
The IMF also warned that AI’s economic benefits are increasingly concentrated in a handful of countries, while mounting government debt, particularly in advanced economies, could drive up borrowing costs and further threaten global growth.
Reuters contributed to this report.