IMF says AI will drive global growth as investments spread beyond the US

IMF Managing Director Kristalina Georgieva said the artificial intelligence investment boom is spreading beyond the United States and becoming a broader driver of global economic growth. Georgieva said other countries are increasing investment in data centers and related infrastructure, while economies connected to the AI hardware supply chain are also benefiting from rising demand. The expansion is helping offset some of the economic pressure from the Iran war and the closure of the Strait of Hormuz. Georgieva said the global economy has handled the resulting energy shock better than the IMF initially feared. The fund estimated in July that the global economy would grow 3% this year, compared with 3.5% in 2025. Updated forecasts are expected in October. Lower energy demand, emergency reserve releases, increased production outside the Gulf and additional renewable energy capacity have helped soften the impact of higher energy prices. Still, Georgieva warned that the shock is not over. Oil and gas reserves are declining ahead of the northern hemisphere winter, leaving the global economy vulnerable to another increase in energy prices. A renewed rise in oil prices could push inflatio...