A. SREENIVASA REDDY (ABU DHABI)
The International Monetary Fund (IMF)’s latest World Economic Outlook (WEO) upgraded global growth projections to 3.3% in 2026, from 3.1% in its October forecast, while retaining its 3.2% growth projection for 2027.
Global growth is estimated to be at 3.3% in 2025, 0.1 percentage point higher than the previous estimate.
Growth prospects for the Middle East and North Africa (MENA) region were also revised higher. The IMF now expects the region to expand by 3.9% in 2026 and 4.0% in 2027, compared with the October forecast, representing upward revisions of 0.2 percentage points for 2026 and 0.3 percentage points for 2027.
The broader Middle East and Central Asia region is projected to grow by 3.9% in 2026 and 4.0% in 2027, 0.1 and 0.2 percentage points higher, respectively than earlier estimates.
Among individual economies in the region, Egypt’s growth forecast was upgraded to 4.7% in 2026 and 5.4% in 2027, up by 0.2 percentage points and 0.7 percentage points, respectively, from the October WEO.
In the United States, the IMF revised its 2026 growth forecast upward to 2.4%, an increase of 0.3 percentage points from October, reflecting stronger-than-expected momentum in late 2025. US growth is expected to moderate to 2.0% in 2027, marginally 0.1 percentage point lower than previously projected.
China’s economy is now expected to grow by 4.5% in 2026, an upward revision of 0.3 percentage points, supported by policy stimulus and easing trade pressures.
Growth is projected to slow to 4.0% in 2027, 0.2 percentage points lower than the October forecast, reflecting persistent structural headwinds.
India’s growth outlook remains among the strongest globally, with the IMF projecting 6.4% growth in both 2026 and 2027, broadly unchanged from the October forecast. India’s growth estimate for 2026 is 0.2 percentage points higher than previously projected.
The IMF noted that global growth remains “steady amid divergent forces,” with headwinds from trade policy uncertainty and geopolitical risks offset by tailwinds from technology-related investment, accommodative financial conditions and the resilience of private sector activity. Global inflation is projected to decline from 4.1% in 2025 to 3.8% in 2026 and 3.4% in 2027, broadly unchanged from the October outlook.
The Fund cautioned that risks to the outlook remain tilted to the downside, citing the possibility of renewed trade tensions, geopolitical escalation, and a reassessment of expectations around artificial intelligence-driven productivity gains. At the same time, faster-than-expected adoption of AI and easing trade frictions could provide upside to growth if they translate into sustained productivity improvements.
The IMF publishes its World Economic Outlook four times a year — in January, April, July, and October. The January update does not include revised growth projections for the UAE, which are typically updated in the April and October reports.