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Global economy to grow at 3.3% in 2026: IMF
19 Jan 2026

The International Monetary Fund (IMF) has projected a resilient global economic growth of 3.3% in 2026 and 3.2% in 2027.

This is the same as the estimated expansion of 3.3% in 2025, according to the January update of the World Economic Outlook report released by the IMF on Tuesday.

The forecast for 2026 is also an upward revision from October's projection by around 20 basis points (0.2%).

IMF attributes growth to tech investment and policy support
Growth drivers

The IMF report highlights that the steady global growth is driven by strong technology-related investments, especially in artificial intelligence (AI).

These are supported by fiscal and monetary policy support, accommodative financial conditions, and private sector resilience in North America and parts of Asia.

However, it also warns of headwinds from changing trade policies and high policy uncertainty.

India's growth forecast revised upward
India outlook

The IMF has also revised India's growth forecast upward, projecting an expansion of 6.4% in FY26 and FY28.

This comes after a stronger-than-expected performance in FY25, leading to an upward revision of 7.3% for FY26.

The global financial institution expects India to maintain its strong growth trajectory with projections of 6.3% for 2026 and 6.5% for 2027 (calendar year).

Global inflation and advanced economies' growth projections
Inflation trends

The IMF also expects global headline inflation to ease from an estimated 4.1% in 2025 to 3.8% in 2026 and further down to 3.4% in 2027.

For advanced economies, growth is projected at a modest pace of around 1.8% in both years (2026 and 2027).

The US economy is expected to grow by a healthy rate of around 2.4% in FY26, supported by fiscal policy measures and lower policy rates amid easing inflation pressures globally.

Euro area and Japan's growth forecasts
Regional projections

The IMF has projected a modest growth rate of 1.3% for the euro area in 2026 and 1.4% in 2027, amid persistent structural challenges.

Japan's economy is expected to slow down with a growth forecast of just 0.7% in 2026, partly offset by fiscal stimulus measures announced by its new government.

Emerging markets and developing economies' growth
Emerging trends

Emerging market and developing economies are expected to witness a growth rate slightly above 4% in both 2026 and 2027.

China, in particular, has seen its growth forecast for 2026 revised upward to an optimistic 4.5%.

This comes as a result of stimulus measures and reduced effective US tariffs following a trade truce.