IMF Warns of Trade Tensions and AI Slowdown Threatening Global Growth

Tue Jan 20 2026 05:25:43 GMT+0200 (Eastern European Standard Time)

In its latest economic outlook, the IMF identifies trade conflicts and a potential downturn in the AI sector as significant risks to global economic stability, even as it projects modest growth for this year.

The International Monetary Fund (IMF) issued a warning regarding trade tensions and the decline of the AI boom as critical risks to the global economy. The organization forecasts a GDP growth of 3.3% for the current year, despite external challenges, while emphasizing the importance of central bank independence for economic stability.

Trade tensions and a reversal in the artificial intelligence (AI) boom are among the main risks to global economic growth, the International Monetary Fund (IMF) has warned.

Its comments came in its latest world economic outlook, where it described the global economy as 'steady', with growth expected to remain 'resilient' this year.

The IMF's forecast was produced ahead of Donald Trump's threat at the weekend to impose tariffs on eight European countries opposed to his proposed takeover of Greenland.

The fund also said the independence of central banks was 'paramount' for global economic stability and growth.

The economic watchdog said global growth was projected to reach 3.3% this year - an increase from its previous forecast of 3.1% - before slowing slightly to 3.2% in 2027.

Speaking to the BBC, IMF chief economist Pierre Olivier Gourinchas said: 'We have a picture of a global economy that is growing at - it's not outsized growth rates but it's quite resilient, quite robust.'

'In a sense the global economy has been shaking off the trade disruptions of 2025, and it's coming out ahead of what we were expecting.'

He said while the effects of Trump’s tariffs have definitely slowed down global activity, there have been other factors more than offsetting this slowdown.

The IMF's report states that the global economy has benefited from 'tailwinds from surging investment related to technology, including artificial intelligence (AI)'.

However, it warned that risks to the global outlook remain tilted to the downside, emphasizing that if expectations surrounding AI growth prove overly optimistic, a market correction could ensue.

Even a mild market correction could significantly affect wealth as investors respond to changes in share prices, leading to cuts in consumption and shifts in business investment plans.

The report cautioned that if trade tensions escalate, it could introduce prolonged uncertainty, hampering economic performance further.

'Domestic political tensions or geopolitical tensions could erupt, leading to new uncertainties and disrupting the global economy through impacts on financial markets, supply chains, and commodity prices.'