IMF raises global growth outlook but warns of AI and debt risks

The International Monetary Fund (IMF) has marginally increased its forecast for global economic growth this year to 3.1%, up from a previous estimate of 3.0%. However, the organization cautioned that emerging risks, particularly those associated with escalating debt levels and the rapid expansion of artificial intelligence (AI), could impact future stability.

The IMF's latest Economic Outlook report highlights that while AI is contributing to economic activity, its benefits are unevenly distributed. The United States and China together account for over three-quarters of the net demand for AI-related equipment. The report also points to a growing concentration of global growth, with just 32 countries contributing 95% of the total.

"The outlook is highly uneven," stated Silvana Tenreyro, the IMF's director of research, highlighting potential market corrections linked to AI, rising bond yields, and cybersecurity threats as key concerns. IMF Managing Director Kristalina Georgieva also expressed worries about AI's long-term impact on employment, estimating that up to 40% of jobs could be affected.

Rising debt levels remain a significant concern, especially in an environment of high borrowing costs. The IMF urged countries to strengthen their fiscal positions. Developing economies and emerging markets are expected to experience slower growth, particularly those exposed to higher energy prices. While growth in the Eurozone is projected to be modest and China's growth may slow slightly, India is anticipated to remain the world's fastest-growing major economy.