Global economy shrugs off US tariff shock, tech spend helped

"The global economy has proved more resilient than many expected in the wake of US tariff shocks, with the International Monetary Fund now projecting worldwide growth of 3.3 percent in 2026 as a surge in AI investment helps offset trade disruption. According to the IMF, the damage from higher US tariffs has so far been limited, with companies finding ways around the disruption by reshuffling supply chains and exports."

"According to the IMF, the key factor behind that resilience is a surge in technology-driven investment, particularly in the US, with AI playing a central role. In the States, IT spending now takes up a bigger slice of the economy than at any point since the early 2000s, a shift the IMF links to Washington's ability to shrug off trade headwinds better than most of its peers."

"Europe, by contrast, is stuck in lower gear. The IMF expects Germany to grow by 1.1 percent in 2026, France by 1.0 percent, and the UK by 1.3 percent. While technology investment is helping prop up global growth, the Fund says the benefits are heavily skewed toward the US, leaving Europe with a more modest outlook. Elsewhere, the picture is patchy. China is forecast to grow by 4.5 percent in 2026, while Japan barely scrapes 0.7 percent. India remains the standout at 6.4 percent,"

The International Monetary Fund projects worldwide growth of 3.3 percent in 2026, driven by a surge in AI and technology investment. Higher US tariffs have caused limited damage as companies reshuffle supply chains and redirect exports. US IT spending has risen to its largest share of the economy since the early 2000s, supporting US growth forecast at 2.4 percent in 2026. Europe faces weaker momentum with Germany at 1.1 percent, France 1.0 percent and the UK 1.3 percent. Growth prospects vary across emerging markets: China 4.5 percent, Japan 0.7 percent, India 6.4 percent, Brazil 1.6 percent, Saudi Arabia and Nigeria about 4.5 percent, Russia 0.8 percent.

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