Symbolic imageIMF holds 2026 growth at 3.1% but warns resilience is under strain
The IMF kept its 2026 global growth forecast at 3.1% on Tuesday but said the room to absorb shocks is narrowing. Its financial stability report names bond yields and a possible AI market correction as key risks.
In its World Economic Outlook, presented in Bangkok on Tuesday, 13 October, the IMF projects 3.4% growth for 2027, a moderate upgrade from April. It expects global inflation of 4.7% in 2026 and 4.1% in 2027, driven mainly by energy and food prices. Activity held up better than expected in the first half despite the Middle East war and trade tensions, helped by AI investment, the fund said. It cautioned that inventories are drawn down and that energy constraints could weaken the AI-led impulse.
Bond yields and AI top the risk list
Bloomberg and Reuters headlines say the fund ranks surging bond yields as the top risk to the financial system, alongside a possible AI market correction. The FT reports that top economies are heading for their biggest budget deficits since Covid.
Zombie firms in Asia
The same report finds that zombie companies, whose earnings have not covered interest for three years, hold 21.4% of corporate debt across 10 Asian economies, up from under 10% in 2008, the FT reports.
Thin buffers
Koha reports that the IMF sees emergency oil reserves depleting and high debt limiting governments' room to shield consumers. Economic counsellor Silvana Tenreyro said the economy's resilience is reaching its limits.