IMF Models Global Output 1.1% Below Baseline by 2028 in AI Pullback

The International Monetary Fund’s downside scenario puts global output 1.1% below baseline by 2028 if a sharp slowdown in AI investment drives down stocks and other asset prices. U.S. output would be 1.8% below baseline, the largest shortfall in the scenario.

The estimate is separate from the IMF’s central outlook, which projects 3.1% global growth in 2026.

The modeled downturn could begin if investors doubt that AI investment will generate sufficient revenue. Falling asset prices could erode investor wealth and restrain consumption, carrying financial-market stress into the wider economy. Companies could also face difficulty repaying debt as the value of related investments declines.

Market concentration adds to the potential exposure. Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla together account for more than 35% of the S&P 500’s market value, up from 12% a decade ago. Their combined market value rose more than 50% over the past two years.

The IMF also flagged circular financing between large cloud providers and AI companies. Those arrangements total about $300 billion and are tied to $650 billion in debt and $1.4 trillion in future financial commitments. The scenario warns that disappointing AI profitability could amplify market selling.

Outside the United States, Asia has the highest exposure. The scenario describes a potential downside to the growth outlook, rather than the IMF’s central projection.