Washington: The International Monetary Fund (IMF) raised its forecast for global economic growth in 2026 to 3.3%, an increase of 0.2 percentage points from its October estimates. This adjustment is attributed to economies' adaptation to tariffs and a sustained increase in artificial intelligence investment. The IMF maintained its growth projections of 3.3% for 2025 and 3.2% for 2027.
According to Saudi Press Agency, the IMF noted that companies have redirected supply chains, while trade agreements have contributed to reducing tariffs, with an assumption that the effective US tariff rate will decrease to 18.5% from around 25%. The fund projected US economic growth at 2.4% in 2026, driven by significant investments in AI infrastructure, and lowered its 2027 forecast to 2.0%. It forecast Spain's growth at 2.3% and kept the United Kingdom's growth unchanged at 1.3%.
The international financial institution also projected China's growth at 4.5% in 2026, which is 0.3 percentage points higher than its October estimates. This increase is supported by lower US tariffs and the diversion of exports to alternative markets. The IMF forecast eurozone growth at 1.3%, noted a slight improvement for Japan, and lowered Brazil's forecast to 1.6% due to tighter monetary policy.
The IMF indicated that AI could boost global growth by up to 0.3 percentage points in 2026. However, it cautioned that AI might also add inflationary pressures or trigger a correction in market valuations if productivity expectations are not met. It forecast global inflation to continue declining from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, which could create room for further monetary easing and support growth.