Washington, Oct 13 — 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 called "a split global economy.”
In its October 2026 World Economic Outlook, the IMF said the interaction of geopolitics and technology "has produced a split global economy: Favorable terms of trade or technology-related exports and investment give some countries a cushion, whereas others face higher import bills and weaker demand.”
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, which supersedes the negative impact of the war," the report said.
Vietnam is projected to grow 8.4 per cent and Malaysia 5.2 per cent in 2026. The IMF said "several southeast Asian economies are projected to benefit from data center activity and the upturn in the global technology cycle.”
The boom is highly concentrated. "Only a few economies produce advanced semiconductors at scale, with Taiwan Province of China and Korea sourcing 62 percent of the net trade in computing hardware related to AI," the WEO said.
On the demand side, "China and the United States are responsible for more than 75 percent of the net imports of AI-related computing hardware in 2025 and 57 percent of newly built data centers since 2024.”
The report said net trade in AI hardware had risen "exponentially" as a share of world GDP, "with the change driven by price effects rather than volumes," adding that "the AI momentum is unlikely to lift all economies equally.”
"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 IMF said.
"Many low-income and vulnerable countries belong to this latter group, increasing the risk that recent shocks will widen income gaps across and within countries," it said.
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 it identified energy-importing emerging economies facing medium-term downgrades.
The WEO linked longer-term prospects to both AI and energy. "Readiness to adopt AI and to reliably meet energy needs will be crucial. Countries that rely more heavily on fossil fuels for energy generation are more exposed to geopolitical shocks," it said.
The Fund was cautious about the productivity payoff. It said there "is a gap between studies showing large productivity gains for specific tasks and the relatively modest effects observed in economy-wide data.”
The report listed a reassessment of AI expectations among the main downside risks. "If expectations of AI-driven profitability and productivity gains prove overly optimistic, investment in AI-related infrastructure and technology could slow sharply," it said.
Equity markets with high concentrations of AI firms "could be vulnerable to a broad repricing," it added, citing recent volatility in technology stocks in Korea and the United States.