IMF Upgrades World Economy Outlook to 3.1% The International Monetary Fund has slightly upgraded its outlook for the world economy, forecasting growth at a sluggish 3.1%. The boom in artificial intelligence is offsetting the damage from higher oil and gas prices, but the benefits are not shared equally across countries. The International Monetary Fund has slightly upgraded its outlook for the world economy, forecasting growth at a sluggish 3.1%. This is an improvement from the 3.0% forecast in July. The global economy expanded at a 3.5% annual pace last year. The IMF expects growth in the United States to remain steady at 2.3% in 2026 and 2027. The organization also predicts that oil prices will be up nearly 41% this year, with an average price of $96 per barrel. This will lead to a 4.7% global inflation rate in 2026, up from 4.1% last year.AI Boom Offsets Higher Oil And Gas PricesThe boom in artificial intelligence is offsetting the damage from higher oil and gas prices. However, the benefits of the AI boom are not shared equally, with the U.S. and China accounting for more than three-quarters of net demand for imports of computer chips and other AI-related equipment. The IMF's director of research, Silvana Tenreyro, said that the outlook is highly uneven, with 32 countries accounting for 95% of global growth. This is compared to 54 countries as of April.The IMF report says that growth is being reallocated across countries according to their exposure to the war-induced supply shock and AI-related demand strength. The impact of AI on employment is a key focus of the meetings in Bangkok. IMF Managing Director Kristalina Georgieva described the impact as a 'slow moving tsunami'. The report estimates that the impact over time on jobs globally will be around 40% - jobs either augmented or downgraded or eliminated.This is especially true at a time of high borrowing costs. The report also notes that growth in the advanced economies is forecast to pick up slightly this year, to 2.1% from 2.0% in 2025, and then to slow to 1.9% next year. It is based on the assumption that shipments of oil and gas through the Strait of Hormuz will resume by March, and that the boom in AI demand will moderate.Developing Economies Face Slower Growth Amid Oil CostsCountries that are somewhat insulated from the energy shocks of the Iran war and that are benefiting from rapid adoption of AI are managing to keep growth on track. However, developing economies and emerging markets more vulnerable to higher costs for oil and gas will see growth slow to 3.7% this year from 4.5% in 2025. The report forecasts that they will regain momentum next year, expanding at a 4.4% annual pace.