IMF Warns AI Correction Risks Global Growth in Bangkok

The International Monetary Fund warned on Tuesday that the global economy faces risks from a potential AI investment correction, rising debt and a prolonged Middle East conflict as it released its latest World Economic Outlook in Bangkok during the IMF and World Bank annual meetings.

According to the IMF report, global growth is projected at 3.1% in 2026, slightly above the previous 3.0% forecast, while growth is expected to reach 3.4% in 2027 if energy shipping conditions normalize.

The IMF said the forecast depends on oil and gas shipments through the Strait of Hormuz resuming by March and shipping conditions returning to pre-war levels by October 2027. A prolonged conflict that keeps oil prices above $130 through the first quarter of 2027 could reduce next year's growth by 0.5 percentage points.

IMF Managing Director Kristalina Georgieva warned that global economic performance has become increasingly dependent on artificial intelligence investment during a Bretton Woods Committee event.

"We now have an economy that is standing on one leg, the AI leg. What if it wobbles? What if there is disappointment and that leads to potentially a more difficult environment?" said Kristalina Georgieva, IMF Managing Director.

The IMF's Global Financial Stability Report also highlighted concerns about AI-related asset valuations, debt servicing pressures and future revenue expectations if investment momentum weakens.

Jason Wu, assistant director of the IMF's Global Markets Analysis Division, said policymakers should monitor financial vulnerabilities linked to AI investment and market valuations.

"If there are questions about the monetization of AI, the equity investments will deplete in value, the debt may be difficult to service, and the revenue commitments in the future may not materialize," said Jason Wu, assistant director of the IMF's Global Markets Analysis Division.

The IMF said AI-related trade has expanded rapidly, with trade in AI goods growing 29% between 2023 and 2025, compared with 8.3% growth in overall global trade during the same period.

Silvana Tenreyro, IMF director of research, said growth patterns are becoming more uneven as countries experience different effects from energy shocks and AI demand.

"The outlook is highly uneven," said Silvana Tenreyro, IMF director of research.

The report said the United States and China account for more than three-quarters of net demand for imported computer chips and other AI-related equipment. It also projected US growth at 2.3% in both 2026 and 2027.

Athanasios Vamvakidis, deputy director of the IMF's Monetary and Capital Markets Department, said an AI market correction could affect asset prices and broader economic activity.

"a slow moving tsunami, but a tsunami nonetheless," said Kristalina Georgieva, IMF Managing Director.

Georgieva also highlighted possible labor market effects from AI adoption, while the IMF said countries need stronger fiscal positions as borrowing costs remain elevated.

"The impact over time on jobs globally we estimate to be around 40% — jobs either augmented or downgraded or eliminated. And we are already seeing some of this impact," said Kristalina Georgieva, IMF Managing Director.

The IMF forecast emerging and developing economies will grow 3.7% in 2026, down from 4.5% in 2025, before recovering to 4.4% growth in 2027. China is expected to expand 4.5% in 2026, while India is forecast to grow 7%.