The global economy is showing resilience for an uncomfortable reason: two powerful shocks are pulling in opposite directions. An artificial-intelligence investment boom is lifting demand, trade and growth, while the war in the Middle East is driving up energy costs and threatening to weaken consumers, businesses and poorer economies.
The International Monetary Fund’s latest outlook projects global growth of 3.1% in 2026 and 3.4% in 2027, after 3.5% growth in 2025. The 2026 estimate is a modest upgrade from the IMF’s July forecast, but it remains below last year’s pace. Global inflation is expected to rise to 4.7% this year before easing to 4.1% in 2027. (IMF)
One economy, two shocks
The first force is the energy shock. Higher oil and gas prices act like a tax on households and companies, reducing purchasing power while raising transportation, manufacturing and food costs. Energy-importing countries face the clearest squeeze, particularly lower-income economies with limited fiscal room to subsidize fuel or protect vulnerable households.
The IMF says emerging and developing economies exposed to higher energy costs will see growth slow to 3.7% in 2026, from 4.5% in 2025. By contrast, countries benefiting from favorable terms of trade or strong technology investment are performing better. (IMF World Economic Outlook)
The second force is artificial intelligence. Spending on data centers, chips, cloud infrastructure and related services is generating a powerful cycle of capital investment and trade. IMF officials describe it as a positive demand shock that is helping offset the damage from higher energy prices. The gains, however, are concentrated in economies with advanced technology firms, deep capital markets and reliable electricity supplies. (IMF briefing transcript)
“The AI related boom through investment and trade has been a key driver of global growth.”
That dynamic explains why headline growth can look relatively stable while conditions feel sharply different across countries. A technology exporter may benefit from new orders and investment; an energy importer may simultaneously confront higher inflation, weaker currency pressure and rising debt-service costs.
The distribution problem
The IMF estimates that 32 countries account for 95% of global growth, a concentration that exposes the limits of aggregate figures. Advanced economies are projected to grow 2.1% in 2026, up from 2.0% in 2025, before slowing to 1.9% next year. The figures suggest stability, but not a broad-based acceleration. (Associated Press)
For governments, the policy challenge is unusually narrow. Raising interest rates to contain energy-driven inflation could weaken investment and employment; cutting rates too quickly could allow price pressures to persist. At the same time, high public debt limits the ability to cushion households or finance long-term infrastructure.
There is also a political dimension. Citizens may see large technology companies reporting strong investment and productivity prospects while household energy bills rise. That contrast can intensify demands for subsidies, windfall taxes, protectionism or restrictions on automation. Such measures could offer short-term relief but may also reduce investment and slow the productivity gains policymakers hope AI will deliver.
The financial risk behind the optimism
The AI boom is not risk-free. The IMF has warned that expectations could become too optimistic, creating a market correction if projected productivity gains, revenues or energy availability fail to justify current investment. Advanced-economy yields have reached multi-decade highs, reflecting persistent inflation, stronger expected growth linked to AI and concerns about fiscal fundamentals. (IMF briefing transcript)
A correction would not necessarily end the technology transition. It could, however, reduce financing for data centers and semiconductor projects, weaken business confidence and expose companies or investors that borrowed against ambitious forecasts. The danger is greatest if an energy shock continues at the same time, leaving central banks less able to respond.
What comes next
The near-term outlook depends first on the duration and scale of the war-related energy disruption. A sustained shock would push inflation higher and deepen the divide between exporters and importers. A rapid easing could allow falling energy prices to reinforce the IMF’s expected 2027 recovery.
The second test is whether AI investment produces economy-wide productivity rather than a narrow construction boom. Governments will need to expand electricity grids, workforce training and digital access while preserving competition. International lenders may also face pressure to help vulnerable countries manage energy costs without crowding out spending on health, education and climate resilience.
The central question is therefore not whether the world economy is growing. It is whether growth is becoming more productive and broadly shared—or merely masking a widening divide between countries positioned to supply the AI boom and those paying more to keep their economies running.