IMF Raises 2026 Global Economic Growth Outlook Amid AI Investment Boom

06:49 AM EST, 01/20/2026 (MT Newswires) -- The International Monetary Fund raised its global economic growth expectations for 2026 as increasing investments in artificial intelligence technology help offset headwinds from trade volatility.

The agency said Monday it now projects real gross domestic product for the world to grow by 3.3% this year, up 0.2 percentage point from its prior forecast in October. The latest forecast matches the estimated 3.3% global growth recorded in 2025, according to the IMF.

For 2027, the agency expects global GDP to decelerate to 3.2%, unchanged from its previous estimate.

"Global economic growth continues to show notable resilience despite significant US-led trade disruptions and heightened uncertainty," IMF Financial Counsellor Tobias Adrian and Economic Counsellor Pierre-Olivier Gourinchas said in a blog post. The global economy is reflecting strength amid multiple factors, such as easing trade tensions, higher-than-expected fiscal stimulus, and a "continued surge" in investment in the information technology sector, especially in AI, according to Adrian and Gourinchas.

On Saturday, President Donald Trump announced that the US will impose a 10% tariff on Denmark, Norway, Sweden, France, Germany, the UK, the Netherlands and Finland, effective Feb. 1, and that the tariff will increase to 25% starting in June. "This tariff will be due and payable until such time as a deal is reached for the complete and total purchase of Greenland," Trump said in a social media post.

In response, the European Union is considering retaliatory tariffs on $108 billion of US goods, according to various media outlets.

The US GDP growth rate for this year is now pegged at 2.4%, up 0.3 percentage point from the IMF's previous projection, reflecting a "stronger-than-expected GDP outturn in the third quarter of 2025," a rebound in activity in the ongoing three-month period following the end of the record-long federal government shutdown, among other factors, the agency said. The 2027 growth rate was lowered by 0.1 percentage point to 2%.

Growth in the euro area is expected to be at 1.3% in 2026 and 1.4% the following year. The IMF increased its economic growth estimate for China by 0.3 percentage point to 4.5% this year, reflecting lower US tariffs on the country's goods, among other factors.

The agency said it now sees global headline inflation easing to roughly 3.8% in 2026 and 3.4% in 2027 from an estimated 4.1% last year. The agency sees inflation returning to target more gradually in the US versus other large economies.

"Risks to the outlook remain tilted to the downside," the IMF said in its report. "Reevaluation of productivity growth expectations about AI could lead to a decline in investment and trigger an abrupt financial market correction, spreading from AI-linked companies to other segments and eroding household wealth."

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