IMF Update on Global Economy, War & AI Technology

In today’s World Economic Outlook update, the IMF points to a resilient, V-shaped recovery, but warns that inflation remains elevated amid geopolitical uncertainty. AI-driven investment is boosting semiconductor firms and reshaping global markets, while renewed US-Iran hostilities could trigger commodity price shocks that hit vulnerable economies hardest. The IMF urges central banks to stay focused on price stability as disinflation trend loses momentum. Plus, other business headlines.

Transcript

The IMF World Economic Outlook (WEO) published twice a year, with updates presents analyses and projections of the world economy in the near and medium term. Today, the geopolitical backdrop is fraught with high uncertainty. But – it is still a world where the worst-case scenario has so far been avoided. Brent crude under $80 a barrel, implies a milder inflation shock than initially feared in a world that proved more resilient than expected. But it is also a world, where increasingly – previous patterns are less instructive in forecasting future trajectories. Central Banks increasingly abandon forward guidance as there are far too many moving parts.

On the US-Iran war … as a cease fire deal was being applauded, America has just launched airstrikes on sites along Iran’s coast in response to reported Iranian attacks on ships sailing through the Strait of Hormuz. Doing their best to shrug off the incident … markets are hoping the Iran crisis is fading as a market driver despite sporadic attacks and counter attacks still playing out. 

Artificial intelligence adoption is accelerating rapidly, driving a boom for global semiconductor and memory-chip companies. SK hynix, the South Korean memory-chipmaker, is expected to raise about $28 billion in an oversubscribed Nasdaq listing on Friday, making it the largest foreign-company listing in US history. Its market value has more than tripled this year to over $1 trillion as demand for its chips surges, also while software firms lag on concerns they could be disrupted by the AI era. 

The thinking is also changing on the impact of AI on inflation. It was initially thought that as costs generally come down due to productivity gains, AI would be disinflationary – the data suggests otherwise as prices of technology components and devices are expected to rise in  a more expensive technology environment

Bitcoin seems to be going nowhere as unparalleled access to private capital has helped finance a massive wave of pioneering AI innovation.  In 2025 -  US private AI investment reached $285B, over 20 times more that in China. Still on global markets, an expected breakout in tech. earnings will help to make US equity valuations look less expensive as price/earnings ratio approach new record highs … typically a sign of impending financial turmoil. The dominance of the US remains unquestioned in global finance as it now accounts for almost half of  the global equity market, despite representing only around 25% if global GDP and less than 5% of the world’s population. 

On China, analysts say that, under Xi – techno industrial policy has shifted from prioritizing catching up to national security, technological self reliance and frontier leadership also overhauling institutions and financing to lift priority sectors.

Also worth mentioning in today’s world is the rise of tokenised assets including funds, treasuries and stable coins as Boston Consulting Group projects tokenised assets could reach $16trillion by 2030. Unified digital ledgers support instantaneous transactions reducing settlement risks, optimising efficiency, lowering cost and enabling real time 24 by 7 liquidity.  The IMF is now projecting that as more money moves to digital  rails, tokenisation can change the world’s financial architecture … also as more buy into and trust the new possibilities – especially perhaps in less developed financial markets … where assets are extensively under leveraged.

Today’s world – while it showcases improving productivity and advancements in technology also presents worsening inequality which poses social and political risk. Nations prosper amid increasing difficulties for low income earners. 

Hello and welcome to Global Business Insights, where we bring perspectives to help you navigate today’s more complex terrain. First – clips from the IMF World Economic Outlook  update. That was earlier today.

The IMF in today’s update says Global growth is broadly unchanged cumulatively from the April 2026 Outlook - projected at 3.0 percent for 2026 and 3.4 percent for 2027. There are crosscurrents from the war shock weighing on energy importers and vulnerable economies, as AI-driven demand lifts countries integrated into the global technology value chain. 

 To other business headlines - Santander is overhauling its Asia-Pacific business, removing top leadership and going after costs. The overhaul has led to removal of the Beijing branch manager, and a shift in focus towards markets in south-east Asia, Japan and South Korea, targeted for growth. The cost-cutting drive has led to axing perks and some staff benefits as Santander expands in fast-growing Asian markets with an eye on tightening operations, improving efficiency of supervision and  boosting profitability. 

Oman India Fertiliser Co. stock jumped about 18% on its Muscat trading debut after raising 261 million Omani rials (over $650m)  in the region’s largest initial public offering of the year. Shares in the fertilizer producer rose to 184 baisa apiece in early trading, from its 156 baisa listing price, which was the top end of a marketed range. The fertilizer producer drew about $12 billion in orders and demand from prominent regional sovereign wealth funds, with the IPO being the latest step in Oman’s push to privatize state assets and deepen its capital markets.

Uganda’s bid to become an oil exporter faces a new legal challenge after four farmers yesterday filed a case in London’s High Court over the East African Crude Oil Pipeline (EACOP) , which is central to President Yoweri Museveni’s economic plans. EACOP will carry crude from the Tilenga and Kingfisher fields in western Uganda to Tanzania’s Tanga port. Claimant Racheal Tugume says she was displaced and that construction has damaged rivers, wildlife and ecosystems local communities rely on.

At the 25th Nigeria Oil & Gas Energy Week, Petroleum Minister Heineken Lokpobiri said PwC will benchmark more than 270 industry fees, taxes and rents to remove fiscal bottlenecks and improve Nigeria’s competitiveness. NNPC Group CEO Bayo Ojulari said reforms saved $3.4 billion through contract restructuring and optimisation from April 2025 to July 2026, while remitting N19.5 trillion to the Federation Account. Renaissance Africa Energy also announced a major hydrocarbon discovery at the JK-004 well in shallow-water OML 74, less than a year after acquiring Shell’s onshore assets.

In Nigeria, President Bola Tinubu called on Afreximbank’s leadership to step up efforts to mobilise Africa’s human, financial and natural resources for sharedgrowth. Speaking during a State House visit by a delegation led by Afreximbank President Dr George Elombi, Tinubu said Africa must move beyond discussion to practical action that drives industrial growth, expands trade, creates jobs, adds value and improves living standards.

Investors are weighing rising tensions in the Middle East and rising oil prices as they look ahead to minutes from the Federal Reserve’s latest policy meeting – also out today. Analysts expect the upcoming minutes may also be shorter and less revealing under Kevin Warsh, the new FED boss.

Well that’s it on this special episode of global business insights. We are now on Spotify, Apple, Youtube podcasts and most popular platforms where you get your podcasts from. Remember to select the notification button if you subscribe on youtube. Thanks for watching. Bye Bye.