IMF Forecast Shows Who Bears the Cost of Global Shocks

The International Monetary Fund projects global output growth of 3.1% in 2026, while managing director Kristalina Georgieva warns of risks to the world economy. The Hindu gives the forecast as 3.06%, compared with 3.5% last year; Mint says the 3.1% estimate is 0.4 percentage points below last year and unchanged from the IMF's April forecast. The IMF expects global output next year to expand slightly faster than it anticipated six months earlier. Import-dependent countries face rising energy prices.

The pressure isn't shared evenly. AI-related investment supported growth in advanced economies, The Hindu reported, while poorer countries faced rising energy prices. Saudi Arabia's economy is projected to shrink by 3.3%, and the Middle East and Central Asia region as a whole by 0.33%. India is projected to grow 7.01% in 2026, down from 7.82% the previous year. Emerging and developing Asia is projected to grow 5.12%, down from 5.6%, while China's projected growth is 4.47%, down from 5%.

Who Pays for the Shocks

The Hindu said the Russia-Ukraine war and the U.S.-Iran war in West Asia would strain countries that depend on imports. Neither war had a permanent ceasefire in sight, the report said. Iran-backed Houthis were increasing attacks in Saudi Arabia, while Russia and Ukraine were increasing attacks on energy infrastructure.

Mint's account places economies on two dimensions: exposure to AI and exposure to rising energy prices. The IMF described potential winners and losers, Mint said, with some countries benefiting from AI investment and others hit by energy shocks. India was placed among economies that could benefit from integrating trade with the AI technology cycle while remaining exposed to further deterioration in net energy exports.

Mint columnist Niranjan Rajadhyaksha said Georgieva used the words “Winter is coming” in a recent speech, borrowing the motto of House Stark in George R.R. Martin's A Song of Ice and Fire novels, later adapted for television. Rajadhyaksha wrote that forecasts generally mark the central point in a range of possible outcomes, while speeches describe tail risks; institutions concerned with credibility sometimes warn rather than habitually cheer.

The outlook came before a selloff in global technology stocks amid rising borrowing costs, hotter-than-expected U.S. inflation data and growing skepticism about returns on large infrastructure capital expenditures. Rajadhyaksha said the West Asia war and subsequent rise in energy prices hadn't yet caused much damage to the global growth outlook. He also noted that the global economy had weathered the pandemic, the Russia-Ukraine war, U.S. tariffs and the expanding war in West Asia, while its current expansion rate remained not too different from the seven years before the pandemic.

Buffers Under Pressure

That resilience has costs in the figures Rajadhyaksha cited. Most countries had less room to use fiscal policy to support activity because public debt was rising. Rising inflation had also disrupted the ability to provide monetary stimulus through lower interest rates or an expansion of central-bank money. Governments had used strategic petroleum reserves to cushion oil-supply disruptions through the Strait of Hormuz.

The IMF ranked a further rise in global energy prices and a sudden end to the AI investment boom above U.S. tariffs as growth risks. That differs from its October 2025 outlook, when tariff increases led the list. Rajadhyaksha said the IMF partly attributed the change to U.S. court rulings and executive actions that left the effective statutory tariff rate about 5.3 percentage points below the level previously assumed.

A New York Federal Reserve study published on October 8 estimated tariffs had added 2.9 percentage points to U.S. inflation in a basket of goods by February 2026; without them, those prices otherwise would have fallen by almost 1%. The increases affected goods made in the United States as well as imported goods.

Other Institutions, Other Limits

The Hindu's October 20 roundup also reported that Delhi Police removed Jantar Mantar as an authorised protest site. Activists said the change would make it harder for citizens to bring demands to political leaders and decision-makers. Police named Ramlila Ground, around 4 km away; Burari Ground, around 15 km away; and CBD Ground in East Delhi, around 13 km away, as alternatives. Delhi Police Commissioner Anurag Kumar issued the order after recommendations from a committee constituted by the Union Ministry of Home Affairs. Protesters valued Jantar Mantar's proximity to Parliament, government offices and the media.

The roundup also covered Starlink's Elon Musk and Reliance Jio's Mukesh Ambani in a dispute over Indian licensing for satellite communications. Musk alleged that certain companies were preventing Starlink from obtaining government approvals and accused “oligarchs” of interference. Reliance said it had “never feared competition.”

The roundup reported that the Enforcement Directorate summoned former Keralam Chief Minister Pinarayi Vijayan to its Kochi zonal office on October 23, 2026, for questioning in a money-laundering case linked to the CMRL-Exalogic pay-off case. The Keralam High Court had dismissed Vijayan's plea against a First Information Report filed against him, his daughter and his son-in-law. The roundup also reported September 2026 wholesale price inflation of 11.4%, with food and fuel the main drivers; Rahul Agrawal, Principal Economist at ICRA, said input-cost pressures contributed to the rise in manufactured-goods inflation.