Commentary. The global economy is doing better than many expected. That is welcome news—but it is not yet a reason for complacency. The latest projections show a world economy being propped up by a narrow and potentially fragile combination of artificial-intelligence investment, fiscal support and continued trade. Our view is that governments should treat the AI boom as an opportunity to manage, not as a substitute for broad-based economic policy.
The International Monetary Fund expects global growth of 3.1% in 2026, slightly above its July forecast of 3.0% but below last year’s 3.5%. It also projects inflation at 4.7% this year before easing to 4.1% in 2027.[1] Those numbers describe resilience, but they also describe deceleration. A forecast that improves modestly while the underlying risks multiply is not a clean victory.
The case for optimism
There is a legitimate argument that artificial intelligence could become a productivity breakthrough rather than merely another technology investment cycle. Strong spending on data centres, chips, software and energy infrastructure is already supporting demand, while wider adoption could eventually raise productivity across sectors. The IMF says AI investment is helping offset the economic effects of war and energy disruption, and an October survey reported by the Financial Times found economists expecting AI’s benefits to extend beyond the United States and China.[2]
That optimism should not be dismissed. Technological advances have repeatedly created new industries, lowered costs and improved services. A country that delays investment in computing capacity, research and worker training could lose competitiveness. Nor should policymakers respond to every market exuberance with blunt restrictions that prevent useful innovation.
But a promising technology does not automatically produce inclusive growth. The gains may accrue first to firms with capital, data and electricity, while workers and regions facing disruption absorb the costs. The more governments rely on AI investment to sustain growth, the more exposed they become to a reversal in corporate expectations.
Resilience has limits
The warning signs are not theoretical. The IMF has identified a prolonged Middle East war, higher energy prices, rising government borrowing costs, extreme weather and a reassessment of AI profitability as threats to the outlook.[3] S&P Global likewise says stronger 2026 momentum is accompanied by mounting headwinds in 2027, with commodity-price pressures pushing inflation forecasts higher and further rate increases expected from major central banks.[4]
These pressures affect households unevenly. Higher fuel and food costs hit lower-income families first. Higher interest rates raise the cost of mortgages, business loans and public debt. Countries with limited fiscal space cannot respond to each shock with subsidies or emergency spending. Growth that looks adequate in aggregate can therefore coexist with a worsening everyday economy.
There is also a political risk. If voters hear that AI is generating prosperity while wages, housing affordability and public services fail to improve, enthusiasm will turn into distrust. That distrust could produce either protectionist backlash or deregulation designed to attract investment at any cost. Neither response would address the distribution of gains.
What responsible policy requires
Our position is not anti-AI. It is anti-dependence on a single engine of optimism. Governments should preserve competition, require transparency where automated systems affect essential rights, and invest in education and retraining that are accessible beyond elite technology hubs. They should also direct more attention to the infrastructure that makes productivity durable: reliable energy, housing, health care, transport and research.
Fiscal policy must be equally disciplined. The IMF has warned that repeated disruptions are eroding countries’ capacity to respond.[5] That means emergency support should be targeted, temporary and financed credibly—not justified by the assumption that tomorrow’s AI-driven growth will settle today’s debts.
The strongest case for AI is that it can help economies produce more with fewer resources and solve problems that currently seem intractable. The strongest case against complacency is that innovation cannot, by itself, insure societies against war, inflation, inequality or climate shocks.
The headline growth forecast deserves recognition. It does not deserve worship. A resilient economy is one that can withstand disappointment in the next technology cycle, protect people during crises and spread opportunity widely. Until that standard is met, the AI boom should be treated as a promising contributor to growth—not as proof that the world economy has solved its deeper problems.