The global economy’s unexpected resilience might have invited the self-congratulation that is a trademark of international official meetings. But policymakers gathered in Bangkok for the 2026 IMF Annual Meetings were wearily aware that “continued resilience cannot be taken for granted”, as noted in the prologue to the closing Chair’s Statement to the International Monetary and Financial Committee meeting. Growth forecasts remain in line with those made a year ago, when interest rates were much lower and no energy shock was in the cards, and even with those made in April, when a short shock was the base case. But what has sustained global growth against the odds so far could falter before the headwinds ease: oil buffers are being depleted; fiscal policy urgently needs to shift from support to deficit reduction as interest rates remain persistently higher; and the AI boom that has been a salvatory growth engine comes with serious questions about its sustainability and long-term economic effects. In addition to these global issues, the combination of fiscal challenges and elections in France and the US were seen as key risks, while some topics that had until recently been in the spotlight found themselves overshadowed.
Better growth than expected for most, worse inflation for all
Despite the energy shock and surge in interest rates, the IMF's latest global growth forecast is unchanged from a year ago and April — at 3.1% in 2026 and 3.4% in 2027 — although the geographical breakdown has shifted: war-exposed countries and many energy importers have been downgraded, while AI-exposed countries have been upgraded. Asia is the standout winner, expected to account for 68% of global growth in 2026 — a feat for a region highly dependent on Gulf energy. Compared to July, the growth forecast for advanced economies is revised up to 2.1% in 2026 (+0.4pp, driven by Germany) and remains at 1.8% in 2027. Among emerging markets, the IMF upgraded Asia and downgraded other regions. Meanwhile, global headline inflation is expected to rise to 4.7% in 2026, mainly due to energy and food, before easing to 4.1% in 2027 (revised +0.2pp)[1].
AI optimism dominates, but with some heavy unanswered questions
The topic of AI dominated the Meetings. The broad consensus was that it is transformational and offers great opportunities to all countries. But, for now, it is producing a mixed bag of economic effects: a powerful boost to global demand, directly through an investment and trade boom and indirectly through wealth effects from stock-market gains; but also much higher interest rates (fuelled by the borrowing needed to fund the AI build-out, and higher prices for chips, all the products they go into, and the electricity and water data centres need).
Beyond this shared diagnosis, strong arguments could be heard on both sides of several critical questions. The most pressing being: will AI generate earnings commensurate with current expectations? If not — or even if expectations are merely downgraded — expect large declines in AI-related asset prices, a sudden stop in funding and a significant blow to growth wherever AI has been a key engine. This is not in anyone’s baseline for next year, but it is clearly a top risk. To what extent will AI boost productivity over five or ten years? The IMF incorporates almost no boost in its five-year baseline, but presents an upside scenario in which it does. Will AI create more jobs than it destroys, raise or reduce labour’s share of income, prove inflationary or deflationary beyond the near term, and strengthen cyber resilience or turbocharge attacks? And how should it be taxed to preserve the fiscal base and offset undesirable labour-market effects?
A mixed policy scorecard
Monetary policy has appropriately taken a hawkish turn nearly everywhere, and an increase in rate rises is likely in key economies, though not enough to threaten growth. Eurozone central bankers were particularly clear in sticking to their “moderate response” playbook.
Fiscal policy, however, has yet to adjust to the end of cheap debt. With public debt high in most countries, a growing share of national budgets will be absorbed by interest payments. Yet very few countries are consolidating. The IMF’s top call to action was to address this urgently, especially among the worst offenders — the US and France. Fiscal restraint would also help central banks curb inflation, reducing the need for higher interest rates.
Policies to redress global imbalances are not closer to being adopted than at previous IMF Meetings, but they were not particularly highlighted by the IMF this time, beyond the mantra that “the US needs to save more, China to consume more, and Europe to invest more”. There were reportedly good discussions behind closed doors — at the G7 on “non-market policies and practices (NMPPs)” — and encouraging early steps in a long journey in Europe-China talks. That is better than nothing, but hardly enough to expect progress within a reasonable timeframe. Meanwhile, the risks of a disorderly unwind will keep rising.
Two zones of concern in focus: France and the US
France was a top concern for many participants. They feared a repeat of the 2010–2012 Eurozone debt crisis, seeing a country with public debt approaching 120% of GDP, sub-par growth, a poor record of fiscal consolidation, riots in the streets and presidential elections six months away, with populist candidates leading the polls. French and European policymakers, alongside private-sector participants, presented a different picture, namely: a fiscal situation that is serious, but is being managed (the draft budget provides for meaningful adjustment and is very likely to be adopted without being weakened); a widening consensus from centre-left to far-right which favours a return to fiscal responsibility, in line with a similar shift in public opinion; and the electoral process is only beginning, with the outcome still wide open — not least because the candidates’ names and numbers are not known. It was also pointed out that the quantum of fiscal adjustment required is not out of line with previous consolidation episodes in France in the 2010s and the 1990s. Still, most participants left not much reassured and expecting a bumpy ride ahead.
US participants outside government saw a growing likelihood of a Democratic sweep in the midterm elections, Either way, they expected little fiscal consolidation, despite a manifestly challenging fiscal path that may end up causing volatility in financial markets. Non-US participants also feared growing policy unpredictability.
Overshadowed topics: the stars of recent IMF Meetings
Tariffs were entirely absent from the agenda and conversations. Tokenised finance (rather than the narrower topic of stablecoins) still featured, but far less prominently: as the field takes shape, discussion has shifted from the conceptual what and why to the technical how. Climate change and low-income countries remained on the agenda, but far less in focus than at previous Meetings. The sheer number of issues demanding attention may be overwhelming financial policymakers’ bandwidth.
*****
All in all, while the global context remains extraordinarily challenging, it’s comforting to see that global financial policy makers are broadly alert to both risks and opportunities, and to what needs to be done for the latter to prevail. Now they need to deliver.
