IMF warns the world economy is "standing on one leg, the AI leg"
The IMF's numbers for what an AI investment bust would cost.
At its Bangkok meetings the IMF forecast global growth of 3.1% for 2026 and 3.4% for 2027, with AI infrastructure investment offsetting higher oil prices from the Middle East war. In a downside scenario, a steep drop in AI investment would cut global GDP by 1.1% by 2028, including 1.8% of US output. "What if it wobbles?" Managing Director Kristalina Georgieva asked. The IMF's Global Financial Stability Report urged policymakers to avoid "complacency" about a pullback in AI investment and valuations, and a protracted war keeping oil above $130 would cut 2027 growth by half a point.
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AI bubble
After exploring IMF flags risks to global economy from AI market correction, war and debt, the debate the IMF is weighing in on is AI bubble.
The argument that a stock market bubble has grown since 2025 amid the AI boom, which The Wall Street Journal called "the biggest economic bet in U.S. history"; by 2026 bond markets dominated its financing.
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