7% growth : India leads major economies in IMF’s 2026 projections

The International Monetary Fund’s October 2026 World Economic Outlook forecasts Sri Lanka’s economy will expand by 4% in 2026 and 3.7% in 2027. Those projections compare with growth of 5% in 2025 and indicate a slower pace of expansion.

The IMF projects Sri Lankan inflation at 5.3% in 2026 and 5.4% in 2027, following a reported rate of negative 0.5% in 2025. It expects unemployment to remain at 3.9% in both forecast years. The current account is projected to move from a surplus equal to 1.6% of GDP in 2025 to deficits of 0.5% in 2026 and 0.3% in 2027.

For the global economy, the Fund forecasts growth to ease from 3.5% in 2025 to 3.1% in 2026, then rise to 3.4% in 2027. It says activity has held up despite Middle East conflict, trade tensions and higher energy costs, while warning that countries face differing exposure to energy shocks, geopolitical risks and shifts in demand. Global inflation is projected to rise from 4.1% in 2025 to 4.7% in 2026, before falling to 4.1% in 2027, with food and energy prices cited as factors.

The IMF projects emerging market and developing economies to grow by 3.7% in 2026 and 4.4% in 2027; emerging and developing Asia is forecast to expand by 5.1% in 2026. India is projected to grow by 7% in 2026 and 2027, China by 4.5% in 2026, and the United States by 2.3% in both years. A separate report gives 2026 projections of 1.3% for Germany and the United Kingdom and 0.7% for Japan; it also says Saudi Arabia is forecast to contract by 3.3% in 2026 and grow by 7.9% in 2027.