The global economy is absorbing two powerful and opposing shocks: a war-driven energy crisis that is reviving inflation, and an artificial-intelligence investment boom that is supporting growth. The result is not a synchronized recovery but a widening split between economies able to benefit from technology and those exposed to higher fuel, food and borrowing costs.

The International Monetary Fund’s latest outlook captures that tension. It projects global growth of 3.1% in 2026, below the 3.4% recorded last year, but slightly higher than its previous forecast. IMF Managing Director Kristalina Georgieva described the forces at work as a “negative energy supply shock” from the Middle East conflict and a “positive AI demand shock.” The IMF’s policy briefing says the two shocks are pulling growth in opposite directions.

Energy is the immediate transmission belt

The war involving the United States and Iran has disrupted fuel supplies and trade through the Strait of Hormuz, one of the world’s most important energy corridors. Refined petroleum prices are reportedly 70% to 95% above pre-war levels, placing particular pressure on countries that rely on imported energy. The IMF expects inflation to reach 4.7% globally this year, while the Middle East and Central Asia region is projected to contract by 0.3%. AFP’s report on the IMF outlook details the regional and distributional effects.

Governments are trying to prevent an energy shock from becoming a broader financial crisis. International Energy Agency members have agreed to accelerate the release of roughly 100 million barrels from remaining emergency reserves, including more than 20 million barrels of diesel. The reported agreement may ease short-term shortages, but strategic reserves cannot permanently replace disrupted production or restore predictable shipping.

The policy dilemma is sharp. Subsidies and tax cuts can shield households and businesses, but they also widen fiscal deficits and may sustain demand when supplies are constrained. Allowing prices to rise protects public finances but shifts the burden onto poorer households and energy-intensive industries. Low-income countries face the greatest vulnerability because they have less fiscal space and are more exposed to food and fertilizer costs.

AI offers growth, but not evenly

Artificial intelligence is providing the counterweight. Investment in computing infrastructure, chips, data centers and software is lifting demand, financial markets and trade. Advanced economies are forecast to grow 2.1% in 2026, with technology-linked manufacturing centers such as Taiwan and South Korea expected to outperform the wider group. Coverage of the IMF meetings notes that the AI boom helped prompt the fund’s more optimistic growth revision.

Yet the boom carries its own risks. Much of the spending is concentrated among a small number of companies and countries, raising questions about whether investment will translate into broad productivity gains or a speculative cycle. The IMF has also warned of a possible AI-related market correction, alongside vulnerabilities in non-bank financial institutions and growing cyber threats. If projected productivity gains fail to materialize, heavily leveraged projects and inflated valuations could amplify a downturn.

The distribution of gains is contested. Technology firms and skilled workers may capture rising returns, while workers in routine occupations face disruption. Governments therefore confront a second fiscal challenge: financing education, infrastructure and social protection while interest rates remain elevated. Georgieva said borrowing costs in advanced economies had reached multi-decade highs, reflecting persistent inflation, stronger demand for investment and concerns about public finances. The IMF briefing links those pressures to a shrinking policy buffer.

What comes next

The central question is whether the AI expansion can remain strong enough to offset prolonged energy disruption. A short conflict and falling fuel prices would allow central banks to focus again on growth. A longer war, by contrast, could entrench inflation expectations, weaken currencies in import-dependent economies and force interest rates higher for longer.

That outcome would expose the uneven structure of the current recovery. Countries integrated into AI supply chains could continue attracting capital, while energy-importing economies face weaker currencies, rising debt-service costs and pressure on food systems. The IMF has warned that repeated shocks are eroding governments’ ability to respond, a concern echoed in its assessment of fiscal and external vulnerabilities. The Daily Star’s account of the IMF meetings reports that trade tensions, El Niño, financial instability and cyber threats remain additional risks.

Policymakers are unlikely to control either shock directly. Their choices will instead determine who bears the adjustment. Targeted energy assistance, stronger international food financing and credible medium-term debt plans could limit the damage. At the same time, regulating AI investment and sharing its productivity gains will matter as much as encouraging innovation. The world economy has avoided a global contraction, but resilience should not be mistaken for security: the next phase will test whether growth can become broader before the available buffers run out.

Sources: International Monetary Fund; AFP; CNBC; Anadolu Agency.