The International Monetary Fund slightly raised its global growth outlook for 2026 on Monday, citing the ability of businesses and economies to adapt to U.S. tariffs that have eased in recent months, alongside a continued surge in investment in artificial intelligence that has boosted asset values and expectations of productivity gains.
In its updated World Economic Outlook, the IMF projected global GDP growth of 3.3% in 2026, up 0.2 percentage point from its October forecast. Growth in 2025 is also expected to reach 3.3%, 0.1 percentage point higher than previously estimated. The Fund maintained its 2027 growth forecast at 3.2%.
The IMF has steadily revised its global outlook higher since July, reflecting trade agreements that lowered U.S. tariff rates after they peaked in April 2025.
“Global growth remains fairly resilient,” IMF chief economist Pierre-Olivier Gourinchas told reporters, noting that the Fund’s 2025 and 2026 projections now exceed the levels forecast before President Donald Trump began his second term.
He said the global economy has largely absorbed the trade and tariff shocks of 2025 and is performing better than earlier expectations.
According to Gourinchas, companies have adjusted to higher tariffs by reshaping supply chains, while some duties have been reduced through trade deals and China has redirected exports to markets outside the United States. The IMF now assumes an effective U.S. tariff rate of 18.5%, down from about 25% in its April 2025 forecast.
U.S. economic growth in 2026 is projected at 2.4%, up 0.3 percentage point from October, partly driven by heavy investment in AI infrastructure such as data centres, advanced chips, and power capacity. The 2027 U.S. growth forecast was trimmed slightly to 2.0%.
Technology investment is also supporting activity in Spain, where the IMF lifted its 2026 growth forecast by 0.3 percentage point to 2.3%, while the UK outlook for 2026 was unchanged at 1.3%.
Gourinchas cautioned that the rapid pace of AI investment could fuel inflation, while unmet expectations around productivity and profits could trigger a correction in elevated asset valuations and weaken demand.
The IMF identified AI-related risks as skewed to the downside, alongside potential supply chain disruptions from geopolitical tensions and renewed trade frictions. A pending Supreme Court ruling on Trump-era tariffs could add further trade policy uncertainty if new levies are imposed under alternative laws, Gourinchas said.
At the same time, the Fund highlighted AI as a potential upside driver for the global economy if investment translates into widespread adoption, stronger productivity, and faster innovation. Under this scenario, global growth could rise by up to 0.3 percentage point in 2026 and by between 0.1 and 0.8 percentage point annually over the medium term.
Among major economies, China’s growth in 2026 is forecast at 4.5%, easing from an estimated 5.0% in 2025 but 0.3 percentage point higher than earlier projections. The upgrade reflects a temporary reduction in U.S. tariffs on Chinese goods and continued export diversification toward Southeast Asia and Europe. Gourinchas warned that China faces increasing protectionist risks unless it rebalances growth toward domestic demand.
The euro zone is expected to grow 1.3% in 2026, up 0.1 percentage point from October, supported by higher public spending in Germany and stronger growth in Spain and Ireland. The 2027 euro zone outlook remains unchanged at 1.4%, as planned defence spending increases are expected to take effect later.
Japan’s 2026 growth forecast was nudged higher due to fiscal stimulus measures, while Brazil stood out as a laggard, with its 2026 growth outlook cut by 0.3 percentage point to 1.6%, largely due to tighter monetary policy to contain inflation.
Globally, inflation is projected to continue easing, falling from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, creating scope for more accommodative monetary policy to support growth, the IMF said.
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