IMF: Artificial intelligence confines 95% of global growth to 32 countries

While the world watches economic recovery indicators under the strain of energy market disruptions, the International Monetary Fund revealed a unprecedented structural imbalance in the map of economic expansion. In the World Economic Outlook report released alongside the annual meetings in Bangkok, the Fund raised its 2026 global growth forecast to 3.1% from 3.0% in its July estimates, but this flexibility hides an exceptional concentration of gains: only 32 countries now account for 95% of total global growth, after 54 countries shared the same share in the April assessment.

The driver of this international cohesion is the massive investment flows into artificial intelligence.which succeeded in offsetting the energy shock caused by the war in the Middle East. Betia Kuifa Brooks, deputy director of the Fund’s research department, explained that global growth would have slipped to 2.5% were it not for the proactive measures taken by governments and companies to absorb the impact of oil prices, noting that the effect of those measures is now gradually waning. Conversely, the Fund has lowered its expectations for about 47% of the world’s economies since April, particularly the energy-importing countries that lie outside advanced technology supply chains.

Growth upgrades were concentrated in advanced economies building AI platforms, led by the United States where the Fund pegged growth at 2.3% for 2026 and 2027, and the Euro area where its outlook was raised to 1.1% driven by defence spending and technology investment. Hardware manufacturers and supply chains also captured the biggest gains, notably in South Korea, Malaysia, Mexico and Thailand. In Asia as well, India maintained its position as the fastest-growing economy at 7.0% for both years, while China’s forecasts fell to 4.5% for 2026 and 4.0% for 2027 due to energy-cost pressures on domestic consumption.

On the other side of the picture, Gulf economies bore the heavier burden of the geopolitical shock and navigation disruptions. According to the Fund’s figures, the Saudi economy faces a 3.3% contraction this year after earlier forecasts indicated 1.7% growth. Kuwait, Iraq and Qatar are also heading toward sharp contractions of around 16%, with the United Arab Emirates and Iran expected to enter a recession. These calculations assume the Strait of Hormuz reopens in March 2027 with oil stabilising at $96 per barrel this year and $87 next year, while the Fund warns of an alternative scenario where the barrel jumps to $130, threatening to push global inflation to 5.2% and deepen the contraction.

We paused our reading of the report at a parallel warning about the fragility of this very tech bet,the Fund sketched an opposite scenario should the viability of AI investments be reassessed and the prices of related assets fall. According to the report, a pullback in those investments could shave 1.1% off global GDP by 2028, causing the United States’ output to drop by 1.8%, which was reflected in sharp sell-offs that hit Asian tech stocks as soon as the forecasts were released.

This sharp divergence puts tech and executive leaders in the Gulf, Egypt and the Levant in front of an immediate practical imperative. With shrinking revenues, public-debt pressures and rising borrowing costs, there is no longer room for showcase projects that soak up cash without proving operational viability. If you manage a computing budget or lead a development team, your financial decision requires a thorough review of inference spend and cloud services, and an exclusive focus on automation that reduces actual operating costs, at a time when the price of importing advanced hardware from the few manufacturing markets is rising.

The IMF data show that AI has become the almost sole financial lever that prevents a sweeping global recession, yet it simultaneously reallocates wealth with unprecedented sharpness in favor of platform owners and chip suppliers. Faced with this equation, regional institutions find themselves between two options: either rationalise tech spending and tie it to direct productivity that offsets contraction margins, or confront soaring import bills that drain budgets in a pressured economic phase.