It is a pleasure to be back at the Business Standard BFSI Insight Summit. When I spoke here last year, my theme was the macroeconomic resilience of emerging markets (EMs), including India, which I attributed to the sound policy frameworks that these economies have adopted and adhered to.
A year on, the resilience of the world economy has held. In today’s talk, I will reflect on the latest global outlook drawing on the recent publications of the IMF, how India is placed in this global context, and what policy priorities may be warranted for other EMs as well as India at this point in time.
My observations are in four parts, one each on growth, inflation, public finances and the financial sector.
1. Growth rates seem resilient across countries
The IMF’s latest World Economic Outlook (WEO, October 2026) projects the global economy to grow at 3.1 per cent in 2026 and 3.4 per cent in 2027. The projection for 2026 is 0.1 percentage point higher than in July, and that for 2027 is unchanged. While these numbers are below the pre-pandemic (2000–19) average of 3.7 per cent and the 2022–25 average of 3.5 per cent, they show continued resilience, given the underlying challenges the global economy has been facing. In fact, actual growth has turned out stronger than projected by the IMF in each of the past three years, even as shocks have accumulated and intensified.