Global Economy in 2026: World Bank Forecasts Slowdown Amidst Varied Country Performance

• World Bank's Global Economic Prospects projects global growth to slow from 2.7% in 2025 to 2.6% in 2026, with US GDP at 2.2% and China's growth at 4.4%.
• Euro zone growth is forecast to sharply decline to 0.9% in 2026 due to tariff pressures and weaker industrial momentum.
• US inflation held steady at 2.7%, above the Federal Reserve's 2% target, while retail sales rose by 0.6% in December, indicating resilient consumer spending.
• India's retail inflation rose to 1.33% in December, remaining benign, giving the RBI room for supportive policy; wholesale inflation shows building input cost pressures.
• India's December trade data reveals a 67% surge in exports to China, while exports to the US slipped, indicating a strategic diversification of trade relationships.

Why It Matters: The global economy faces a slowdown in 2026, with varied performances across major economies.