IMF keeps Thailand at 1.6% growth; warns on AI stocks bubble
IMF keeps Thailand’s 2026 growth at 1.6% (2.2% in 2027) and warns an AI stock correction could cut global growth by 0.4pp
- The IMF kept its forecast for Thailand’s GDP growth this year at 1.6%, and expects it to recover to 2.2% next year.
- It warned that if AI-related equities undergo a market correction, global growth could be reduced by 0.4 percentage points.
- Booming AI investment has been a key prop for the global economy, but it also creates vulnerabilities if investor confidence weakens.
- Despite these risks, the IMF raised its overall global growth forecast for 2026 to 3.3%.
The International Monetary Fund (IMF) has released an updated World Economic Outlook (WEO), raising its forecast for global growth in 2026 to 3.3%, up 0.2 percentage points from its earlier projection. It said businesses and economies have been adapting to US tariffs, which have eased in recent months, while a continuing boom in artificial intelligence (AI) investment has supported asset wealth and expectations of productivity gains.
“We find that global growth remains quite resilient,” IMF chief economist Pierre-Olivier Gourinchas said, adding that the IMF’s global forecasts for 2025 and 2026 were stronger than those published in October 2024, before Donald Trump was elected to a second term as US president.
He said businesses have adjusted to higher US import tariffs by rerouting supply chains, while trade agreements have lowered some duties and China has shifted exports to non-US markets. The latest IMF forecasts assume an effective US tariff rate of 18.5%, down from about 25% assumed in the IMF’s April 2025 forecast.
The IMF said US growth is expected to reach 2.4% in 2026, supported in part by heavy investment in AI-related infrastructure such as data centres, high-performance AI chips and power, before easing to 2.0% in 2027.
IMF warns an AI “bubble” could cut global growth by 0.4pp
However, the IMF warned that heavy reliance on a narrow set of sectors—particularly US technology and AI—could leave both the US and global economy vulnerable if investors reassess AI’s productivity potential, triggering a stock-market correction.
The IMF cautioned that a renewed reassessment of AI-driven productivity expectations could reduce investment and spark a sudden financial-market correction that spreads beyond AI-linked firms, eroding household wealth. It noted that while US equities may be less overvalued than during the dotcom bubble in 2001, stock-market value relative to the size of the economy is currently higher, implying potentially larger wealth and consumption effects from a similar-scale decline.
IMF economists estimated that a “moderate” equity correction could reduce global growth this year to 2.9%, a hit of 0.4 percentage points, and said central banks should be prepared for rapid policy-rate cuts under such a scenario.
At the same time, the IMF said that successful adoption of new technologies could lift global growth—by as much as 0.3 percentage points in 2026 and by 0.1–0.8 percentage points per year in the medium term—depending on the speed of adoption and improvements in AI readiness across countries.
The WEO update also warned that questioning the independence of the US Federal Reserve could lead to higher inflation and require higher interest rates.
IMF keeps Thailand’s 2026 forecast at 1.6%
For Thailand, the IMF maintained its GDP growth forecast at 1.6% for 2026, with growth expected to improve to 2.2% in 2027, unchanged from its previous WEO projections.
The IMF also raised its 2026 forecasts for Malaysia and Indonesia, and upgraded projections for China and India, saying the latter two are increasingly pulling away from other developing economies.
