Tech Over Tariffs: IMF Sees Brighter 2026 as Investment Surge Lifts Productivity

In its latest World Economic Outlook, the International Monetary Fund (IMF) has once again increased its global economic growth projections for 2026. This upward revision to 3.3%—a 0.2 percentage point rise from previous estimates—suggests that the world economy is proving more durable than expected. This resilience is largely attributed to businesses successfully navigating U.S. trade barriers and a significant surge in artificial intelligence investment, which is driving both market wealth and productivity hopes.

IMF Chief Economist Pierre-Olivier Gourinchas noted that the global economy is effectively "shaking off" the trade volatility seen in 2025. This recovery is supported by a decrease in effective U.S. tariff rates, which dropped from an expected 25% to roughly 18.5% following new trade agreements. Furthermore, companies have mitigated the impact of these duties by restructuring supply chains and seeking alternative markets, such as China’s shift toward Europe and Southeast Asia.

Regionally, the outlook remains mostly positive:

United States: Growth for 2026 is projected at 2.4%, bolstered by massive spending on AI infrastructure like data centers and specialized semiconductors.

China: Forecasts were raised to 4.5% for 2026, aided by a temporary reduction in U.S. tariffs and redirected export strategies.

Europe: The euro zone saw a modest upgrade to 1.3% for 2026, fueled by German public spending and strong economic activity in Spain and Ireland.

Japan: Fiscal stimulus from the new government led to a slight upgrade.

Brazil: Conversely, Brazil’s forecast was lowered to 1.6% as the country maintains strict monetary policies to curb recent inflation.

While the AI revolution offers a potential "upside" that could boost global growth by as much as 0.3 percentage points in 2026, it also introduces specific risks. The IMF warned that if AI productivity fails to meet high expectations, it could trigger a market correction. Additionally, the rapid pace of the boom could potentially reignite inflation.

Other lingering threats to the forecast include geopolitical friction, renewed trade disputes, and legal uncertainty surrounding U.S. tariff authorities. Despite these concerns, the IMF anticipates a steady decline in global inflation—dropping to 3.8% in 2026—which should allow central banks to lower interest rates and provide further support to the global expansion.