|
Dhivya KM
12 July 2026 |
On 08 July, the IMF released the July 2026 Update on World Economic Outlook (WEO), revising its April economic growth projections. The report focused on the resilience of the global economy despite heightened geopolitical and trade uncertainties. It assesses the impact of the Middle East crisis on global energy markets, growth of investment in AI and its increasing contribution to global economic growth, trade, and productivity.
The following are five key takeaways from the report.
1. Global economy shows resilience, but with a slim margin
The world economy's ability to withstand a shock to its energy supply without falling into a recession is an achievement in its own right. The growth rate of 3 per cent registered in Q1 2026 surpassed the estimate in April by the Fund, as the world has successfully diversified over the last ten years its energy dependence on hydrocarbons. It appears that the efforts to diversify energy supply sources following previous shocks were not in vain, and policy-makers now have a little more room to maneuver. However, the IMF did not declare this problem solved. The energy supply buffer has been depleted, and the supply chain is still under pressure, so there will be no cushion next time.
2. The AI-driven growth is reshaping the global economy, but unevenly shared
A significant finding is the uneven distribution of the AI-driven growth cycle. Export economies in the semiconductor and technology chain, such as Korea, Malaysia, and Vietnam, received a considerable boost from rising demand for AI hardware and infrastructure. Growth in India was fuelled less by exports than by domestic consumption, while that in China was offset by high-tech exports and infrastructure investments. The significance lies in participation in the technology value chain. Economies participating in the technology value chain become an important factor of resilience, while non-participants in the chain suffered from higher energy and food prices.
3. Disinflation is failing, and it challenges the credibility of central banks
Since 2024, the IMF has maintained that global disinflation has been progressing in the right direction. Headline inflation is set to increase to 4.7 per cent in 2026 from 4.1 per cent in 2025, after which it will resume its descent in 2027. Since this hike is due to energy and food prices rather than an over-heated demand, the policy solution is different from the solution needed in case of a demand-induced jump. Despite core inflation being stable, the IMF has warned that this should not be taken to mean the target is back. Core indicators are expected to have normalized by mid-2027 in the UK, by end-2027 in the US and Japan, and by 2028 in the eurozone. In those cases where credibility is weak, then the expectations will turn out to be un-anchored.
4. Geopolitical disruptions hit the Middle East hardest, but Asia held firm
Geography influenced the strength of the shock, demonstrating the disparity that occurs between international risk and the national outcome. Economic growth in the Middle East and Central Asia region is expected to weaken considerably to 0.7 per cent in 2026. Countries highly vulnerable to transportation and energy supply interruption will suffer economic contraction until 2027, assuming reopening of the Strait of Hormuz beginning in mid-July. The US, which is an energy exporter and major technological investor, had a strong performance, recording economic growth of 2.3 per cent. Meanwhile, while the Europe recorded slower growth of 0.9 per cent due to high energy prices and low confidence. The emerging Asia region displayed some resiliency, with India, Vietnam and Malaysia doing relatively well, while Pakistan's growth remained steady at 3.6 per cent because of its recovery plan supported by the IMF.
5. Emphasis on policy discipline to preserve economic resilience
The IMF’s recommendation is to maintain stable interest rates where inflation is transitory, but to be prepared to raise rates when central banks lack credibility. Fiscal policy advocates providing targeted aid to vulnerable groups for a specified period and area, rather than general energy subsidies. This was due to the loss of fiscal space due to poor policy decisions. Countries that benefit from energy or technology booms are advised to save the gains they make. In regards to structural reforms, the advice concerning renewable energy, digitisation infrastructure, and artificial intelligence has become urgent. Cooperation must avoid trade barriers and export restrictions but should encourage quick resolution of debt under the Group of Twenty Common Framework.
NIAS Global Politics Team
Dattesh ParulekarÂ
R Vidya
Athar Zafar
Adarsh Vijay
Ashik J Bonofer
Ramya B
Shreya Upadhyay
Lakshmi Karlekar
Anand V
Preetha Renganarayanan
Advik Sunanda Mohan
Advik Sunanda Mohan
Samraksha Mukund
NIAS Global Politics Team
NIAS Global Politics Team
Namrata L Ghanghatkar, Priyanka Makhijani and Urja R KudalkarÂ
Lekshmi MK
Glynnis Winona B
Namrata L Ghanghatkar and Urja Kudalkar
Lekshmi MK
Angelo Neil Augustine, Disha V, Yaazhini Thiruchelvi DD and Srishti HS
Preetha Renganarayanan
NIAS Global Politics Team
Namrata L Ghanghatkar, Priyanka Makhijani and Urja R Kudalkar
Preetha Renganarayanan
Akshath Kaimal
Namrata L Ghanghatkar
Urja R Kudalkar
Urja R Kudalkar
Nithin V
Sreemaya Nair
Madhura Meenakshi Tanikella, Namrata L Ghanghatkar, Priyanka Makhijani and Urja R Kudalkar
Akshath Kaimal
Yesasvi Koganti
Aparna A Nair
Namrata L Ghanghatkar, Priyanka Makhijani and Urja R Kudalkar
Priyanka Makhijani
Namrata L Ghanghatkar
Akshath Kaimal
Namrata L Ghanghatkar
Adwaith Sankar
Namrata L Ghanghatkar, Priyanka Makhijani and Urja R Kudalkar
Urja R Kudalkar
Adwaith Sankar
Dattesh D Parulekar
Nithin V
Namrata L Ghanghatkar, Priyanka Makhijani and Urja R Kudalkar
Namrata L Ghanghatkar, Priyanka Makhijani, Urja R Kudalkar
Manikranth Chakravarthula
Priyanka Makhijani
Adwaith Sankar
Namrata L Ghanghatkar
Madhura Meenakshi Tanikella
Preetha Renganarayanan
Madhura Meenakshi Tanikella
Madhura Meenakshi Tanikella
Yesasvi Koganti
Madhura Meenakshi Tanikella
Aishal Hab Yousuf
Madhura Meenakshi Tanikella
Glynnis Winona B
Deb Dutta
Glynnis Winona B
Nithin V
Aishal Hab Yousuf
Glynnis Winona B
Aishal Hab Yousuf
Kirsten Wilfred Coelho
Sreemaya Nair
Kirsten Wilfred Coelho
Santhosh Guru PR
Rakshitha B
Glynnis Winona B
Brighty Ann Sarah
Brighty Ann Sarah
Nithin V
Siddhi Halyur
Aishal Hab Yousuf
Glynnis Winona B
Brighty Ann Sarah
Jenin Raj S
Aishal Hab Yousuf
Nithin V
Brighty Ann Sarah
Akshath Kaimal
Lakshmi Venugopal Menon
Ashik J Bonofer
Haans J Freddy
Brighty Ann Sarah
Mahesh Bhatta
Siddhi Halyur
Aishal Hab Yousuf
Jayasree
Rebecca Ann Oommen
Manik Dhawan
Santhosh Guru PR
Lekshmi MK
Brighty Ann Sarah
Tanvi Thara Harendra Jha
Mahesh Bhatta
Sreemaya Nair
Mahesh Bhatta
Yesasvi Koganti
Global Politics Team
Global Politics Team
Abhimanyu Solanki
Global Politics Team
Global Politics Team
Global Politics Team
Global Politics Team
Global Politics Team
Global Politics Team
Global Politics Team
Brighty Ann Sarah
Yesasvi Koganti
Lekshmi MK
Aparna A Nair
Lekshmi MK
Vani Vyshnavi Jupudi
Lekshmi MK
Global Politics Team
Lekshmi MK
Femy Francis
Yesasvi Koganti
Akshath Kaimal
Preetha Renganarayanan
Lekshmi MK
IPRI Team
Brighty Ann Sarah
Anu Maria Joseph
Lekshmi MK
Preetha Renganarayanan
Brighty Ann Sarah
Preetha Renganarayanan
Brighty Ann Sarah
Brighty Ann Sarah
Lekshmi MK
Brighty Ann Sarah
Lekshmi MK
Akshath Kaimal
Preetha Renganarayanan
Preetha Renganarayanan
Lekshmi MK
Sunidhi Sampige & Tanvi Harendra
Rohini Reenum
Akriti Sharma
Anu Maria Joseph
Brighty Ann Sarah
R Preetha
Akriti Sharma
Brighty Ann Sarah
Akriti Sharma
Rohini Reenum
Brighty Ann Sarah and Preetha R
D Suba Chandran
Neha Tresa George
Vani Vyshnavi Jupudi
Brighty Ann Sarah and R Preetha
Brighty Ann Sarah and R Preetha
Abhimanyu Solanki
Brighty Ann Sarah and R Preetha
Abhiruchi Chowdhury
Vani Vyshnavi Jupudi
Brighty Ann Sarah and R Preetha
Abhiruchi Chowdhury
Naomi Miriam MathewÂ
Rohini Reenum
Brighty Ann Sarah, R Preetha, Santhiya M, Aparna A Nair and M Kejia
Merin Treesa Alex
Kasvi Batra
Emma Rose Boby
Fleur Elizabeth Philip
Merin Treesa Alex
Santhiya M
Farhaz Rashid Ahmed
Gauri Gupta
Brighty Ann Sarah, R Preetha, Santhiya M, Aparna A Nair & M Kejia
Kumari Gargi, Naomi Miriam Matthew, & Fleur Elizabeth PhilipÂ
Santhiya M
Lekshmi MK
R Preetha
Ananya Dinesh
Emma Rose Boby
Merin Treesa Alex
Fleur Elizabeth Philip
Aashish Ganeshan
Abhiruchi Chowdhury
Femy Francis
Gauri Gupta
Padmashree Anandhan
Abhiruchi Chowdhury
R Preetha and Brighty Ann Sarah
R Preetha
Santhiya M
Brighty Ann Sarah
Vaneeta
Souparno Rakshit, Emma Rose Boby and Souparnika Suresh
Kumari Krishna
C Shraddha
Kumari Krishna
Nupur Priya
C Shraddha, Vaishak Sreekumar, Kumari Krishna, Nova Karun K
Prajwal TV
Kavithasri M
Ayan Datta
Sayeka Ghosh
Karthik Manoharan
Prajwal TV
Mayank Bharti
Ronakk Tijoriwala
Deepika Seervi
Dhriti Mukherjee
Prajwal T V
IPRI Team
IPRI Team
Dhriti Mukherjee
Dhriti Mukherjee
By young scholars of NIAS Course on Global Politics: Contemporary World Order and Theories. Compiled by Sayeka Ghosh.
By the NIAS-IPRI Course scholars on Contemporary Conflicts, Peace Processes, Theories and Thinkers. Compiled by Ayan Datta.
Rohini Reenum
NIAS South Asia Team
NIAS South Asia Team
Devi Chandana M
Sayeka Ghosh
Arya Prasad
Sayeka Ghosh
Diya Madhavan
Ramya B
NIAS South Asia Team
T C A Raghavan
Karthik Manoharan
Rosemary Kurian
Manasa G
D Rohan Kumar
LS Hareesh
Ramya B
NIAS South Asia Team
NIAS South Asia Team
NIAS South Asia Team
NIAS Latin America Team
NIAS South Asia Team
IPRI Team
Femy Francis
IPRI Team
IPRI Team
IPRI Team
CEAP Team
IPRI Team
IPRI Team
IPRI Team
IPRI Team
IPRI Team
Amit Gupta
IPRI Team
IPRI Team
IPRI Team
Prof Joyati Bhattacharya
Lakshmi Parimala H
Rashmi BR and Akriti Sharma
Sethuraman Nadarajan
Avishka Ashok
Sourina Bej
Naina Singh
Amit Gupta
Shalini Balaiah
Prakash Panneerselvam
Abigail Miriam Fernandez
STIR Team
Aswathy Koonampilly
Vineeth Daniel Vinoy
Joeana Cera MatthewsÂ
Bhuvan Ningania
Jeshil J Samuel
Lokendra Sharma
Abigail Miriam Fernandez
Joeana Cera MatthewsÂ
Anju Joseph
Sarthak Jain
Sourina Bej
Vibha Venugopal
Dincy Adlakha
Udbhav Krishna P
Joeana Cera Matthews
Julia Mathew
Dhanushaa P
SDP Scholars
Abigail Miriam Fernandez
​​​​​​​Rashmi BR
GP Team
V S Ramamurthy and Dinesh K Srivastava
Lokendra Sharma
Harini Madhusudan
Abigail Miriam Fernandez
Akriti Sharma
Avishka Ashok
Apoorva Sudhakar
Sukanya Bali
Apoorva Sudhakar
Avishka Ashok
Harini Madhusudan
Abigail Miriam Fernandez
Sukanya Bali
Aparupa Bhattacherjee
N Manoharan and Drorima Chatterjee
GP Team
D Suba Chandran
Abigail Miriam Fernandez
Aparupa Bhattacherjee
Apoorva Sudhakar
Teshu Singh
Rashmi Ramesh
Aparaajita Pandey
Teiborlang T Kharsyntiew
Sandip Kumar Mishra
Sourina Bej
Harini Madhusudan
Gunjan Singh
Sukanya Bali
Sumedha ChatterjeeÂ
GP Team
Rashmi Ramesh
Harini Madhusudan
Harini Madhusudan
Sukanya Bali
Savithri Sellapperumage
Harini Madhusudan
Rashmi Ramesh
Mallika Devi
Srikumar Pullat
Harini Madhusudan
Lokendra Sharma
Nancy Pathak
Shreya Sinha
Kamna Tiwary
Tamanna Khosla
Vaishali Handique
Sneha Tadkal
Unnikrishnan M J
Rashmi Ramesh
A Padmashree
Oviya A J
Harini Sha P
Chavindi Weerawansha
Arjun C
Lakshmi V Menon
Samreen Wani
Sankalp Gurjar
Harini Madhusudan
Sourina Bej
Harini Madhusudan
Samreen Wani
Mahesh Bhatta
N. Manoharan
Prof PM Soundar Rajan
Harini Sha P
Rashmi Ramesh
Sourina Bej
D. Suba Chandran
Harini Madhusudan
La Toya Waha
Jenice Jean Goveas
Sanduni Atapattu
Chavindi Weerawansha
Chrishari de Alwis Gunasekare
Aparupa Bhattacherjee
Natasha Fernando
Ruwanthi Jayasekara
N Manoharan
Asanga Abeyagoonasekera
Kabi AdhikariÂ
Jenice Jean Goveas
Fatemah Ghafori
Sukanya Bali
Lakshmi V Menon
Rashmi Ramesh
Harini Madhusudan
Aparupa Bhattacherjee
La Toya Waha
Rohej Khatiwada
Rashmi Ramesh
Kabi AdhikariÂ
Malini SethuramanÂ
Aarathi Srinivasan
Roshni Sharma
Rashmi Ramesh
Dhruv Ashok
Prathiksha Ravi
Aswathy K
Padmini Anilkumar
Abigail Miriam Fernandez
Lakshmi V Menon
Sourina Bej
Sukanya Bali
Harini Madhusudan
Parikshith Pradeep
Sukanya Bali
Aparupa Bhattacherjee
Aashiyana Adhikari
Shailesh Nayak
Lakshmi V Menon
Abigail Miriam Fernandez
Sukanya Bali
Parikshith Pradeep
Sourina Bej
Rashmi Ramesh
Rashmi Ramesh
Harini Madhusudan
Parikshith Pradeep
GP Team
Harini Madhusudan
D. Suba Chandran
Parikshith Pradeep
Nidhi Dalal
Aparupa Bhattacherjee
Sourina Bej
Lakshman Chakravarthy N & Rashmi Ramesh
Sukanya Bali
Lakshman Chakravarthy N
Sukanya Bali
Parikshith Pradeep
Harini Madhusudan
Aparupa Bhattacherjee
Mahesh Bhatta
Titsala Sangtam
Lakshmi V Menon
Seetha Lakshmi Dinesh Iyer
Harini Madhusudan
Abigail Miriam Fernandez
Sourina Bej
Mahath Mangal
Titsala Sangtam
Aparupa Bhattacherjee
Raakhavee Ramesh
Abigail Miriam Fernandez
Mahath Mangal
Mahath Mangal
Titsala Sangtam
Abigail Miriam Fernandez
Mahath Mangal
Sourina Bej
Abigail Miriam Fernandez
Harini Madhusudan
Seetha Lakshmi Dinesh Iyer
Abigail Miriam Fernandez
Seetha Lakshmi Dinesh Iyer
Aparupa Bhattacherjee
Ryan Mitra
Sourina Bej
Lakshmi V Menon
Harini Madhusudan
Aparupa Bhattacherjee
Seetha Lakshmi Dinesh Iyer
Sourina Bej
Harini Madhusudan
Aparupa Bhattacherjee
Seetha Lakshmi Dinesh Iyer
Harini Madhusudan
Lakshmi V Menon
Sourina Bej
Harini Madhusudan
Aparupa Bhattacherjee
D. Suba Chandran
Seetha Lakshmi Dinesh Iyer
Mahesh Bhatta
Nasima Khatoon
Harini Madhusudan
Sourina Bej
Seetha Lakshmi Dinesh Iyer
Harini Madhusudan
Ryan Mitra
Sourina Bej
Harini Madhusudan
Divyabharathi E
Lakshmi V Menon
Nasima Khatoon
Harini Madhusudhan
Sourina Bej
Ryan Mitra
Hely Desai
Young Scholars Debate
Siddhatti Mehta
Sourina Bej
Aparupa Bhattacherjee
Harini Madhusudhan
Druta Bhatt
Divyabharathi E
Apoorva Sudhakar
Divyabharathi E
Oishee Majumdar
D. Suba Chandran
Sourina Bej
Gayan Gowramma KC
Druta Bhatt
Siddhatti Mehta
Miti Shah
Aparupa Bhattacherjee
Harini Madhusudan
Apoorva Sudhakar
Hely Desai
Manushi Kapadia
Lakshmi. V. Menon
Divyabharathi E
Miti Shah
Hely Desai
Druta Bhatt
Manushi Kapadia
Miti Shah
Divyabharathi E
Hely Desai
Apoorva Sudhakar
Lakshmi V Menon
Samreen Wani
Divyabharathi E
Ann Maria Shibu
Dhruv Ashok
Lakshmi V Menon
Harini Madhusudan
Jamyang Dolma
Divyabharathi E
Lakshmi V Menon
Jamyang Dolma
Shalini E
Dhruv Ashok
Apoorva Sudhakar
Ann Maria Shibu
Divyabharathi E