The IMF’s World Economic Outlook update, published on January 19, projects global growth at 3.3 percent in 2026 and 3.2 percent in 2027. These are close to the estimated 3.3 percent growth for 2025.
Small Upward Revision for 2026
The IMF said the 2026 forecast is slightly higher than its October 2025 outlook. The projection for 2027 is unchanged.
According to the IMF, this steady performance reflects a balance between opposing global forces.
Technology Investment Offsets Trade Pressures
The report noted that shifting trade policies continue to act as a drag on global activity. However, strong investment linked to technology, especially artificial intelligence, is helping to offset these pressures.
AI-related investment has shown the strongest momentum in North America and Asia, supported by accommodative financial conditions, fiscal and monetary support, and private-sector adaptability.
Inflation Expected to Ease Gradually
Global headline inflation is expected to continue declining. The IMF projects inflation to fall from 4.1 per cent in 2025 to 3.8 per cent in 2026, and further to 3.4 per cent in 2027.
These projections remain broadly unchanged from the October outlook. Inflation is expected to return to target more slowly in the United States than in other major economies.
Downside Risks Remain
Despite the stable outlook, the IMF warned that risks remain tilted to the downside.
A reassessment of productivity gains from AI could weaken investment and trigger sharp financial market corrections. Such shocks could spread beyond technology firms and reduce household wealth.
In addition, rising trade tensions could prolong uncertainty and weigh on global activity. Domestic political pressures or geopolitical conflicts could also disrupt supply chains, financial markets, and commodity prices.
The IMF further cautioned that high public debt and widening fiscal deficits could place upward pressure on long-term interest rates and tighten financial conditions.
Upside Potential From AI and Trade Stability
On the upside, the IMF said stronger and faster adoption of AI could lift productivity and support more sustainable growth.
Global activity could also improve if trade tensions ease and uncertainty declines.
The IMF stressed that policies aimed at restoring fiscal buffers, maintaining price and financial stability, reducing uncertainty, and advancing structural reforms remain essential to support medium-term growth.
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Last modified: January 20, 2026
