The boom in AI investment is spreading from the US to power the world economy, the head of the IMF has said, signaling strong global growth as countries weather the Iran war.

"What started out as a US phenomenon with AI is now becoming a growth engine for the global economy, with other countries ramping up construction of data centres and other infrastructure," Kristalina Georgieva, the fund's managing director, told journalists on Tuesday. She added that the global economy had "weathered the energy shock caused by the closure of the Strait of Hormuz better than we feared."

Shipping through the strait has dried up since the US launched its war on Iran in February. Before the conflict, about a fifth of seaborne oil supplies flowed through the waterway, and its closure has pushed up global energy prices. The IMF said in early July that the world's economy would expand by 3 per cent this year, down from 3.5 per cent in 2025.

Georgieva's remarks came after German growth figures showed Europe's largest economy was on track for its best year since 2022. While the AI investment boom was still most notable in the US, other countries "plugged into the supply chain" and exporting AI hardware were also benefiting. But she warned that the energy shock was not over, and another rise in oil prices could fuel inflation and force central banks to raise interest rates.