IMF Raises 2026 Global Growth Forecast to 3.3% as AI Investment Offsets Trade Risks
Washington, Monday, 19 January 2026.
The International Monetary Fund (IMF) has revised its 2026 global growth forecast upward to 3.3 percent, identifying a persistent surge in artificial intelligence investment as a critical counterweight to recent trade volatility. In a compelling display of economic resilience, the IMF notes that the global economy is effectively “shaking off” the tariff disruptions of 2025 and is now performing better than predictions made before the protectionist measures began. While the easing of U.S. tariffs and robust growth projections for the United States and China underpin this optimism, the Fund cautions that this stability remains vulnerable to geopolitical escalations and the successful realization of anticipated AI productivity gains.
Resilience in the Face of Protectionism
The updated World Economic Outlook, released on Monday, projects that global output will expand by 3.3 percent in 2026, marking a 0.2 percentage point increase from the estimate provided in October 2025 [1][6]. This upward revision suggests the global economy is maintaining the same 3.3 percent pace seen in 2025, effectively defying earlier fears regarding the long-term impact of protectionist trade policies [1][2]. The IMF attributes this economic buoyancy largely to a sustained investment boom in artificial intelligence, which has bolstered asset wealth and fueled expectations of significant productivity gains across advanced economies [1][2]. Additionally, the easing of United States tariffs, which peaked in April 2025, has created a more favorable commercial environment than previously anticipated [1].
Uneven Recovery and Regional Shifts
A significant portion of this growth momentum is concentrated in the world’s two largest economies. The IMF raised its 2026 growth forecast for the United States to 2.4 percent, a 0.3 percentage point increase from October, driven specifically by infrastructure spending related to artificial intelligence [1][5]. Similarly, China’s growth projection for 2026 was upgraded by 0.3 percentage points to 4.5 percent, a revision credited to the reduction in U.S. tariff rates and internal demand adjustments [1]. Pierre-Olivier Gourinchas, the IMF’s chief economist, noted the global economy’s adaptability, stating that it is “shaking off” the trade disruptions witnessed in 2025 [1][2].
Inflation Trajectories and Policy Risks
Amidst these shifting growth patterns, global inflation is expected to continue its downward trajectory, falling from an estimated 4.1 percent in 2025 to 3.8 percent in 2026, a decline of 0.3 percentage points [1][3]. The IMF expects inflation to further recede to 3.4 percent by 2027 [1]. Monetary stability remains a central theme in the Fund’s assessment, which emphasized that the independence of central banks is “paramount” for macroeconomic stability [3]. This warning arrives amidst a complex political landscape, including reports that U.S. Federal Reserve Chair Jerome Powell became the subject of a criminal investigation on January 11, 2026 [3]. Furthermore, the IMF cautions that the very AI boom driving growth could paradoxically heighten inflationary pressures or lead to market corrections if the anticipated productivity gains fail to materialize [1].
Geopolitical Shadows Looming
It is crucial to note that these forecasts were finalized in December 2025, meaning they do not fully account for the geopolitical instability that has characterized the first weeks of 2026 [5]. Recent events, including the U.S. seizure of Venezuela’s President Nicolás Maduro, protests in Iran, and renewed tariff threats regarding Greenland, pose material risks to this outlook [5]. The IMF has explicitly warned that a resurgence of trade tensions or a “spiral of escalation” could undermine the projected growth [3][5]. Looking further ahead, the Fund anticipates a slight deceleration, projecting global growth to slow to 3.2 percent in 2027 [1][4].