The artificial intelligence investment boom is lifting a handful of chip-making economies while energy importers outside the technology supply chain are being squeezed by the Middle East war, producing what the International Monetary Fund has called "a split global economy".
In its October 2026 World Economic Outlook, released on Tuesday, the IMF said the interaction of geopolitics and technology "has produced a split global economy: favourable terms of trade or technology-related exports and investment give some countries a cushion, whereas others face higher import bills and weaker demand."
The winners
The biggest winner is Taiwan, whose growth the Fund projected at 10.7 per cent in 2026, up from 8.8 per cent in 2025, before slowing to 4.3 per cent in 2027. In Korea, growth is expected to rise to 3.3 per cent in 2026 from 1.1 per cent in 2025, buoyed by strong external demand for semiconductors that the report said supersedes the negative impact of the war. Vietnam is projected to grow 8.4 per cent and Malaysia 5.2 per cent in 2026.
The boom is highly concentrated. The IMF noted that only a few economies produce advanced semiconductors at scale, with Taiwan and Korea sourcing 62 per cent of the net trade in computing hardware related to AI. On the demand side, China and the United States accounted for more than 75 per cent of net imports of AI-related computing hardware in 2025 and 57 per cent of newly built data centres since 2024.
The losers — and the risks
Energy-importing economies with little connection to the technology value chain face the most difficult configuration: higher import costs and exchange-rate pressures, weaker real incomes, more constrained fiscal space and fewer offsetting demand impulses, the Fund said. Many low-income and vulnerable countries belong to this group, increasing the risk that recent shocks will widen income gaps across and within countries.
India is an exception to that pattern. Its growth is driven by resilient domestic demand and robust services activity rather than chip exports, the report said, and the Fund excluded India when identifying energy-importing emerging economies facing medium-term downgrades.
The IMF was cautious about the productivity payoff, noting a gap between studies showing large gains for specific tasks and the modest effects seen in economy-wide data. It listed a reassessment of AI expectations among the main downside risks, warning that equity markets with high concentrations of AI firms could be vulnerable to a broad repricing.
Sources:
- AI boom splits world economy into winners, losers: IMF — tennews.in (IANS)
In its October 2026 World Economic Outlook, released on Tuesday, the IMF said the interaction of geopolitics and technology "has produced a split global economy: favourable terms of trade or technology-related exports and investment give some countries a cushion, whereas others face higher import bills and weaker demand."
The winners
The biggest winner is Taiwan, whose growth the Fund projected at 10.7 per cent in 2026, up from 8.8 per cent in 2025, before slowing to 4.3 per cent in 2027. In Korea, growth is expected to rise to 3.3 per cent in 2026 from 1.1 per cent in 2025, buoyed by strong external demand for semiconductors that the report said supersedes the negative impact of the war. Vietnam is projected to grow 8.4 per cent and Malaysia 5.2 per cent in 2026.
The boom is highly concentrated. The IMF noted that only a few economies produce advanced semiconductors at scale, with Taiwan and Korea sourcing 62 per cent of the net trade in computing hardware related to AI. On the demand side, China and the United States accounted for more than 75 per cent of net imports of AI-related computing hardware in 2025 and 57 per cent of newly built data centres since 2024.
The losers — and the risks
Energy-importing economies with little connection to the technology value chain face the most difficult configuration: higher import costs and exchange-rate pressures, weaker real incomes, more constrained fiscal space and fewer offsetting demand impulses, the Fund said. Many low-income and vulnerable countries belong to this group, increasing the risk that recent shocks will widen income gaps across and within countries.
India is an exception to that pattern. Its growth is driven by resilient domestic demand and robust services activity rather than chip exports, the report said, and the Fund excluded India when identifying energy-importing emerging economies facing medium-term downgrades.
The IMF was cautious about the productivity payoff, noting a gap between studies showing large gains for specific tasks and the modest effects seen in economy-wide data. It listed a reassessment of AI expectations among the main downside risks, warning that equity markets with high concentrations of AI firms could be vulnerable to a broad repricing.
Sources:
- AI boom splits world economy into winners, losers: IMF — tennews.in (IANS)
