TV OYOMINTO NEWS
The International Monetary Fund (IMF) has warned that a slowdown in artificial intelligence investment, rising government debt and prolonged conflict in the Middle East could threaten global economic stability.
In its latest World Economic Outlook, released during the IMF and World Bank annual meetings in Bangkok, the fund projected global economic growth of 3.1 per cent in 2026, slightly above its previous forecast of 3.0 per cent.
surrounding artificial intelligence investment could threaten global
economic growth.
The IMF attributed the improved outlook partly to continued investment in artificial intelligence infrastructure, which has supported economic activity in major technology markets and countries supplying related hardware.
However, the organisation cautioned that the positive outlook remains vulnerable to several risks. A sharp decline in AI-related investment could weaken business activity and financial markets, particularly if expected profits fail to justify the large sums invested in the sector.
The ongoing conflict in the Middle East is another major concern. Disruptions to oil supplies and shipping routes have pushed energy prices higher, increasing costs for businesses and consumers.
Higher fuel prices can contribute to inflation, raise transport and production expenses and complicate decisions by central banks on interest rates.
Developing economies face additional pressure from rising borrowing costs and growing public debt, which can reduce the money available for healthcare, education, infrastructure and other essential services.
The IMF has also warned that an extended conflict and sustained high oil prices could weaken growth further in 2027.
For countries such as Kenya, global economic developments matter because changes in oil prices, international interest rates and investor confidence can affect import costs, inflation and government borrowing.
The outlook therefore highlights the need for governments to strengthen public finances, manage debt carefully and build resilience against external economic shocks.
Although technology investment is supporting growth, the IMF’s warning shows that global economic stability remains exposed to geopolitical tensions and financial market uncertainty.
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