AI investment keeps global economy growing, but Bangladesh faces pressure: IMF

International Monetary Fund (IMF) has sharply downgraded its forecast for Bangladesh’s economic growth in the current fiscal year to 3.2 per cent. The fund also expects global inflation to rise to 4.7 per cent this year.

The outlook is outlined in the IMF’s October 2026 edition of its World Economic Outlook, titled Resilience Under Strain, Urgent Choices. The report says the global economy continues to grow despite a series of economic shocks, but the benefits of that resilience are not being shared equally among countries.

According to the IMF, the global economy is projected to grow by 3.1 per cent in 2026, with growth expected to accelerate slightly to 3.4 per cent in 2027. Global inflation, meanwhile, is forecast to reach 4.7 per cent this year before easing to 4.1 per cent next year.

The report says countries benefiting from large investments in technology are in a relatively stronger position. Investment in artificial intelligence (AI), in particular, is helping sustain economic activity. By contrast, countries heavily dependent on imported energy and less integrated into the technology sector are facing greater pressure. As a result, disparities in economic performance could become more pronounced even as global growth continues.

The IMF believes the effects of the conflict in the Middle East have yet to be fully reflected in the global economy. Alternative energy sources, adjustments to supply chains, the use of reserves and more efficient energy consumption have helped countries manage the disruption. Meanwhile, substantial investment in AI has supported economic activity, helping the global economy avoid a more severe immediate shock.

However, concerns remain over how long this resilience can last. A prolonged conflict in the Middle East or further disruptions to energy supplies could drive up energy prices. The consequences would extend beyond energy markets, putting pressure on production costs, import bills and government spending. Higher energy prices could also make goods and services more expensive to produce, adding to inflationary pressures.

According to the IMF, countries that depend on imported energy but have limited participation in the technology sector are particularly vulnerable. Higher energy import bills could put pressure on their balance of payments and exchange rates. Rising import costs could also erode real incomes and purchasing power. Where government revenue and fiscal capacity are limited, providing adequate support to households struggling with higher costs could become increasingly difficult.

The situation could be even more challenging for low-income and economically vulnerable countries. Rising energy and food prices would increase the cost of living, while higher production costs could affect businesses across multiple sectors. These countries would face the dual challenge of sustaining economic growth and protecting household purchasing power and living standards.

The IMF has identified the conflict in the Middle East as a major source of risk to the global economy. If the conflict persists or intensifies, energy and food prices could remain elevated for an extended period, making inflation harder to contain. Maintaining fiscal balance and managing external payment pressures would also become more difficult for many countries.

Attacks on energy infrastructure, cyberattacks and extreme weather events could pose additional risks, the fund warned. Disruptions to supply chains could increase the cost of producing and transporting goods, pushing up market prices and potentially prolonging inflationary pressures.

Uncertainty is also mounting in international trade. Trade disputes, higher tariffs and shifts in production arrangements are weighing on the expansion of global commerce.

The IMF forecasts slower growth in global trade in 2026, with conditions potentially stabilising in 2027. However, continued trade tensions could place further strain on economic activity and supply chains.

Rising government debt is another major concern for the global economy. Borrowing costs are increasing in major economies, while governments face growing spending demands related to ageing populations, climate change and national security. This is leaving them with less fiscal room to respond if another crisis emerges. Continued pressure from debt-servicing costs and other public expenditure could make it increasingly difficult to maintain economic stability.

The IMF’s broader assessment is that the global economy is maintaining its growth momentum but remains exposed to significant risks. Investment in technology is supporting growth in some countries, while energy pressures, geopolitical conflicts, trade uncertainty and rising debt are complicating the outlook for others.

For energy-import-dependent economies such as Bangladesh, these global risks could add to pressure on economic growth, inflation and the balance of payments.