World Economic Outlook (WEO) 2026

Why in News?

The International Monetary Fund (IMF), in its October 2026 World Economic Outlook (WEO), raised India’s economic growth forecast to 7% for 2026, citing stronger-than-expected domestic demand and robust services activity. It also projected growth of 7% for 2027 on a fiscal-year basis.

Key Findings

• Growth forecast for 2026: 7%, an upward revision of 0.6 percentage points from the July 2026 WEO Update and 0.5 percentage points from the April forecast.
• Growth forecast for 2027: 7%, revised upward by 0.3 percentage points from July and 0.5 percentage points from April.
• Growth in FY 2025–26: India’s economy expanded by 7.8%, according to the report.
• Calendar-year projections: The IMF projected India’s growth at 7.4% in 2026 and 7% in 2027.

Factors Supporting India’s Growth

• Strong domestic demand: Higher-than-expected domestic demand contributed to the upward revision.
• Services activity: Robust activity in the services sector supported economic growth.
• Trade agreements: Agreements involving India and the European Union, the EU and MERCOSUR, and the United Kingdom and India could help reduce tariff and non-tariff barriers, strengthen supply-chain resilience and support adjustment to changing global trade policies.

Challenges to Global Growth

The IMF noted that the conflict in the Middle East and elevated oil prices were weighing on the global economy.

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