According to the latest World Economic Outlook update released by the International Monetary Fund, global growth is projected to remain resilient at 3.3% in 2026 and 3.2% in 2027, roughly equivalent to a projected 3.3% output in 2025. The forecast saw a slight upward revision for 2026 compared to the October 2025 projections, and no change for 2027.However, beneath the steady headline numbers, momentum remains uneven across regions and sectors. Shifts in trade policies, increased policy uncertainty and geopolitical risks are being balanced by strong technology-based investments – particularly those involving artificial intelligence – supportive fiscal and monetary policies and private sector adaptability. Global inflation is expected to gradually ease, although risks to the outlook are tilted to the downside.Top points to know
stable global growth path
World output is forecast to contract 3.3% in 2026 and 3.2% in 2027, a slight slowdown from 2025 but stronger than earlier expectations for next year.
AI investment is the major tailwind
Rising technology and AI-related investment – most visible in North America and parts of Asia – is offsetting trade frictions and slowing demand in other regions.
Inflation is continuously decreasing
Global headline inflation is expected to fall from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, largely unchanged from earlier forecasts.
US inflation normalization slows
Inflation in the United States is projected to return to target more slowly than in other major economies, partly due to tariff pass-through and increased cost pressures.
Trade tensions have eased, but risks remain
Recent truces – such as the US-China moratorium on tariffs and export controls until November 2026 – have eased near-term tensions, but uncertainty remains well above early 2025 levels.
Technology stocks diverge sharply
The equity market reflects a growing gap between dominant technology firms and the rest of the market, highlighting concentration risks if AI-related expectations are reassessed.
uneven regional motion
The US saw strong growth led by technology investment, while parts of Europe suffered weakness in exports and manufacturing; China’s growth slowed amid weak domestic demand but resilient exports.
global trade is still intact
Technology-related exports – such as semiconductors and appliances – continued to expand rapidly, offsetting slower growth in other product categories.
Fiscal policy becoming accommodative in major economies
The fiscal stance in major advanced economies, including the US, Germany and Japan, is expected to be stimulatory in the near term, which will help offset slowing growth.
Downside risks dominate the outlook
A sharp reassessment of AI-driven productivity gains could accelerate the market recovery, while renewed trade flare-ups, geopolitical shocks, higher public debt and rising long-term interest rates could weigh on activity.
Ground level:
The global economy is proving resilient on the surface, supported by AI-driven investment and policy support. But the balance is delicate. Sustaining growth over the medium term will require restoring fiscal buffers, preserving price and financial stability, reducing policy uncertainty, and pursuing long-delayed structural reforms.
