The IMF’s forecast models a scenario where a cooling of the AI sector forces a widespread asset selloff and tighter financial conditions. Such a reversal would likely cause U.S. equity prices to tumble by 20% in 2026, with global markets experiencing a similar, though less acute, 15% decline. This volatility would ripple into sovereign bond markets and weaken the dollar as investor appetite for U.S. assets wanes.

The impact would reach far beyond American borders, particularly affecting high-end tech exporters like South Korea, which could see export prices plummet by 20%. Global GDP faces a potential 0.4% contraction by 2028 if the current investment surge ends in a correction. While the IMF notes that a successful AI rollout could conversely boost global GDP by 0.6% by 2029, the current reliance on tech-sector spending leaves little room for policy error. Athanasios Vamvakidis, deputy director of the IMF’s monetary and capital markets department, emphasized that policymakers must prioritize building economic buffers now to navigate the inherent unpredictability of these technological shifts.