The International Monetary Fund (IMF) said artificial intelligence is supporting the global economy through the technology-driven investment boom, but its latest forecasts do not yet assume any productivity gains from AI, while inflation risks remain elevated.
AI Investment Offsets Geopolitical Headwinds
In its July World Economic Outlook update, the IMF said the global economy is being shaped by two opposing forces: the lingering effects of the conflict involving Iran and an AI-driven investment boom.
The IMF projected global growth of 3% in 2026 and 3.4% in 2027, down from the 3.5% average recorded in 2024 - 2025, while the outlook was broadly unchanged from its April forecast on a cumulative basis.
Its baseline assumes the AI-driven technology cycle moderates from current levels and includes no exogenous boost to productivity from AI, while adding that faster AI adoption could lift growth beyond the baseline forecast.
The Federal Reserve's June policy meeting cited "AI-related price pressures" as one factor behind higher core goods inflation.
The Fed also said AI could eventually boost productivity, but that the effect "would likely take time to materialize."
Inflation Risks Remain Elevated
The IMF raised its global headline inflation forecast for 2026 to 4.7%, saying the disinflation trend that had been underway since early 2024 has stalled.
It added that central banks should remain focused on price stability as commodity prices, technology-driven demand and inflation expectations continue to shape the outlook.
The IMF said a weaker-than-expected payoff from artificial intelligence could trigger a pullback in technology investment and a sharp correction in richly valued technology stocks, particularly in economies and markets with heavy exposure to AI-related companies.
AI Spending Continues to Support Growth
The AI investment cycle has been supported by strong demand for semiconductors, networking equipment and data center infrastructure, while hyperscalers continue to invest hundreds of billions of dollars in expanding AI capacity.
The IMF added that economies integrated into the technology value chain have benefited from the AI-driven investment boom, helping cushion the effects of higher energy prices and geopolitical uncertainty.
