IMF Raises Global Growth Forecast to 3.1 Percent, Warns AI Boom and Debt Pose Risks The IMF upgraded its 2026 global growth forecast to 3.1 percent but warned of risks from an AI-driven market correction, job losses, and rising debt. The report comes as leaders gather in Bangkok for the IMF and World Bank fall meetings. The International Monetary Fund on Tuesday slightly upgraded its outlook for the world economy, forecasting global growth of 3.1 per cent this year. That is up from its July forecast of 3.0 per cent but below the 3.5 per cent expansion in 2025. Growth in 2027 should rebound to 3.4 per cent, the IMF said. The report was released as economic and financial leaders gathered in Bangkok for the fall meetings of the IMF and World Bank. The IMF warned that risks remain from rising debt and the financial frenzy around artificial intelligence. The meetings run through mid-October.US Growth Steady Amid Slower Euro Area ExpansionThe IMF expects growth in the United States to hold steady at 2.3 per cent in both 2026 and 2027. Advanced economies collectively will grow 2.1 per cent this year, up from 2.0 per cent in 2025, before slowing to 1.9 per cent next year. The euro area's 21 countries will grow just 1.1 per cent this year and 1.2 per cent in 2027.China, the world's second-largest economy, is expected to expand 4.5 per cent this year, down from 5.0 per cent in 2025, in line with the government's official target. India is once again forecast to be the fastest-growing major economy, advancing at a 7.0 per cent clip, down from 7.7 per cent last year. Developing economies and emerging markets more vulnerable to higher energy costs will see growth slow to 3.7 per cent this year from 4.5 per cent in 2025.They are forecast to regain momentum next year at a 4.4 per cent pace. The Middle East and Central Asia are expected to contract this year before recovering to 6.3 per cent growth in 2027. The forecasts assume a nearly 41 per cent increase in oil prices this year, averaging $96 US a barrel. They also assume shipments of oil and gas through the Strait of Hormuz will resume by March and that the AI demand boom will moderate.Global Inflation Forecast and AI Boom Offset RisksThe IMF foresees global inflation at 4.7 per cent in 2026, falling to 4.1 per cent next year. The boom in artificial intelligence is offsetting damage from sharply higher oil and gas prices, IMF economists say. But the technology carries its own risks. Its benefits are not shared equally.The U.S. and China account for more than three-quarters of net demand for imports of computer chips and other AI-related equipment. The outlook is highly uneven, said Silvana Tenreyro, the IMF's director of research, speaking to reporters in Bangkok. Growth is increasingly concentrated, with 32 countries accounting for 95 per cent of global growth, compared with 54 countries as of April.The global economy is not simply slowing or accelerating; rather, growth is being reallocated across countries according to their exposure to the war-induced supply shock and AI-related demand strength, the report says. Athanasios Vamvakidis, deputy director at the IMF's monetary and capital markets department, said an AI-related correction in stock markets is just one risk. Rising bond yields are another evolving problem, along with cyberthreats that could disrupt financial systems.Asia AI Share Sell Offs and Employment Concerns RiseUnderscoring such concerns, sell-offs of AI-related shares swept through Asia on Tuesday. South Korea's Kospi sank as much as 7 per cent before closing 5.5 per cent lower. The AI boom's effect on employment is another worry, a slow-moving tsunami, but a tsunami nonetheless, IMF managing director Kristalina Georgieva said. The impact over time on jobs globally we estimate to be around 40 per cent, jobs either augmented or downgraded or eliminated.And we are already seeing some of this impact, she said. Georgieva urged countries to do a better job of improving national finances and taming mounting debt. U.S. President Donald Trump is hosting a summit in Washington with top leaders in AI development. Trump has dismissed warnings over artificial intelligence, arguing for the need to stay ahead of China in the AI arms race.Geoffrey Hinton, considered the godfather of AI, says Trump does not really understand AI and is ill-advised about it. Banking watchdogs are ramping up scrutiny of AI as stability fears mount, according to a Reuters exclusive. The IMF is a 191-nation lending organization that works to promote economic growth and financial stability and to reduce global poverty. At the Bangkok meetings, finance ministers and central bank governors will assess the world economy and discuss strategy.