IMF Projects Global Growth Deceleration to 3.1% in 2026 Amid War Shocks and AI-Related Demand

The International Monetary Fund (IMF) released its October 2026 World Economic Outlook (WEO), forecasting a deceleration in global growth to 3.1% in 2026 from 3.5% in 2025, before a recovery to 3.4% in 2027. The IMF attributes this reallocation of growth across countries to their exposure to war-induced supply shocks and the strength of artificial intelligence (AI)-related demand. Advanced economies are projected to grow 2.1% in 2026, with those integrated into AI supply chains, like Taiwan and South Korea, expected to post significantly higher figures. The WEO also highlighted that low-income developing countries, particularly net oil importers not exposed to the AI investment boom, are most vulnerable to shocks from the Iran war.