Gita Gopinath says global economy remains ‘precariously poised’ despite India, Germany growth upgrades
ADVERTISEMENT
The global economy has remained resilient despite a series of shocks, but the recovery is becoming increasingly fragile and uneven, former International Monetary Fund (IMF) Deputy Managing Director Gita Gopinath said on Tuesday, highlighting the contrasting growth prospects of major economies.
“The latest World Economic Outlook from @IMFNews describes a world that is so far resilient yet precariously poised. Germany and India get sizable upgrades to growth,” Gopinath wrote in a post on X, reacting to the IMF’s October 2026 World Economic Outlook.
Her comments come against the backdrop of mounting uncertainty over the global economic outlook, with geopolitical tensions, elevated commodity prices and potential financial market corrections posing risks to growth.
Inflation and geopolitical tensions cloud global outlook
The IMF expects global economic growth to slow to 3.1% in 2026 from 3.5% in 2025, before recovering to 3.4% in 2027. Global inflation is projected to rise to 4.7% in 2026 before easing to 4.1% the following year.
The Fund has warned that a prolonged conflict or further escalation in the Middle East could keep energy and other commodity prices elevated, intensifying inflationary pressures and weighing on economic activity.
Trade disruptions, tariffs and supply-chain adjustments could also weigh on global commerce, even as technology-related investment provides support to economic activity.
AI investment emerges as another risk
The IMF has also flagged the possibility that a reassessment of expected returns from artificial intelligence-related investments could trigger corrections in equity markets and tighten financial conditions.
Such a correction could affect investor sentiment and financing conditions, potentially amplifying existing vulnerabilities in the global economy.
The risks to the outlook remain tilted to the downside, the Fund said, underscoring the uncertainty surrounding the pace and durability of the global recovery.
Gopinath congratulates IMF chief economist
Gopinath also congratulated Silvana Tenreyro, the IMF’s Economic Counsellor and Director of the Research Department, on the release of her first World Economic Outlook in her role as the Fund’s chief economist.
“Congratulations to @STenreyroIMF and team on her first WEO launch,” she added.
The October report highlights the divergence in growth prospects across economies, with upward revisions for India and Germany standing out against a global outlook marked by inflationary pressures and geopolitical uncertainty.