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Global GDP growth to be resilient at 3.3% in 2026; India above US: IMF
The United States accounts for 9.9 per cent of projected worldwide GDP expansion, while China ranks higher at 26.6 per cent.
Global growth is projected at 3.3 per cent in 2026 and at 3.2 per cent in 2027, the IMF’s World Economic Outlook January 2026 Update said.
India accounts for 17 per cent of projected worldwide GDP expansion, the US accounts for 9.9 per cent, while China ranks higher at 26.6 per cent.
Global headline inflation may drop from 4.1 per cent in 2025 to 3.8 per cent in 2026 and 3.4 per cent in 2027.
The update marks a small upward revision for 2026 and no change for 2027 compared with that in the October 2025 WEO.
“This steady performance on the surface results from the balancing of divergent forces. Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector,” the report said.
Global headline inflation is expected to decline from an estimated 4.1 per cent in 2025 to 3.8 per cent in 2026 and further to 3.4 per cent in 2027, the IMF said. The inflation projections are also broadly unchanged from those in October and envisage inflation returning to target more gradually in the United States than in other large economies.
For India specifically, growth has been revised upward by 0.7 percentage points to 7.3 per cent for 2025, reflecting a better-than-expected third quarter and strong momentum in the fourth quarter. Growth in the country is projected to moderate to 6.4 per cent in 2026 and 2027 as cyclical and temporary factors fade.
While inflation in China is expected to rise gradually from low levels, inflation in India is likely to return close to target after a sharp decline in 2025.
Risks to the global outlook remain tilted to the downside. Re-evaluation of productivity growth expectations about AI could lead to a decline in investment and trigger an abrupt financial market correction, spreading from AI-linked companies to other segments and eroding household wealth, noted the report.
Trade tensions could flare up, prolonging uncertainty and weighing more heavily on activity.
Domestic political tensions or geopolitical tensions could erupt, introducing new layers of uncertainty and disrupting the global economy through their impact on financial markets, supply chains and commodity prices, the latest WEO said.
Larger fiscal deficits and high public debt could put pressure on long-term interest rates and, in turn, on broader financial conditions.
On the upside, activity could be further lifted by AI-related investment and eventually transform into sustainable growth if faster AI adoption translates into strong productivity gains and increased business dynamism.
Activity could also be supported by a sustained easing in trade tensions, it added.
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