daftandbarmy
Army.ca Fossil
- Reaction score
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Recession unlikely...
Summary
The IMF forecast global growth at 3.1% for 2026, a slight uptick from a 3.0% forecast in July as still-strong AI infrastructure investment offset higher oil prices caused by the war in the Middle East.
The latest World Economic Outlook report, released in Bangkok during the annual meetings of the IMF and World Bank, also predicts 3.4% growth in 2027, but that is based on assumptions that the Strait of Hormuz reopens by March and shipping conditions return to the pre-war situation by October 2027.
A more protracted war that kept oil prices above $130 through the first quarter of 2027 would cut growth next year by half a percentage point, the IMF said.
In another downside scenario, the IMF said that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP by 1.1% by 2028, including a 1.8% drop in US output.
Summary
- IMF sees global growth at 3.1% in 2026 and 3.4% in 2027
- Risks to outlook include ending of AI boom and growing debt levels
- IMF says steep drop in AI investment could cut global GDP by 1.1% by 2028
- Prolonged Middle East war could cut 2027 growth by 0.5 percentage point
- IMF warns policymakers against complacency
The IMF forecast global growth at 3.1% for 2026, a slight uptick from a 3.0% forecast in July as still-strong AI infrastructure investment offset higher oil prices caused by the war in the Middle East.
The latest World Economic Outlook report, released in Bangkok during the annual meetings of the IMF and World Bank, also predicts 3.4% growth in 2027, but that is based on assumptions that the Strait of Hormuz reopens by March and shipping conditions return to the pre-war situation by October 2027.
A more protracted war that kept oil prices above $130 through the first quarter of 2027 would cut growth next year by half a percentage point, the IMF said.
In another downside scenario, the IMF said that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP by 1.1% by 2028, including a 1.8% drop in US output.
