IMF Sees Uneven Growth, India Forecast at 7%

The IMF’s October outlook forecasts global growth of 3.1% in 2026, down from 3.5% in 2025, while raising its forecast for India’s FY2027 growth to 7% on stronger domestic demand and services. Global inflation is expected to reach 4.7% this year, with AI investment supporting activity in some economies but not yet delivering a major productivity boost. The Iran war and energy-price shock are expected to weigh on energy-importing and lower-income countries; the Middle East and Central Asia are projected to contract, with especially steep declines in Kuwait, Iraq and Qatar, while Bahrain is also expected to contract and Saudi Arabia may be cushioned by alternative export routes. The IMF’s gradual recovery outlook assumes the Strait of Hormuz reopens by March 2027 and energy flows normalize, but warned that prolonged conflict, high debt and weaker-than-expected returns from AI could strain growth and public finances. It cut Bangladesh’s FY2026-27 growth forecast to 3.2% and raised its inflation projection to 10.9%, and forecast just 0.4% growth for France in 2026. The Fund urged policymakers to balance short-term support with fiscal discipline and reforms.