The week that just unfolded was not an ordinary data week. It was a deluge—a barrage of economic releases and reports from across the world that offered a rare, real-time snapshot of where the global economy stands in 2026. More than just numbers, this data-heavy week acted as a window into the fault lines, strengths, and contradictions shaping the world economy.
First things first. The most comprehensive assessment of global growth came from the World Bank’s flagship report, Global Economic Prospects. It projected that world growth would edge down from 2.7 per cent in 2025 to 2.6 per cent in 2026 before recovering slightly to 2.7 per cent in 2027. The same report estimated US GDP growth at 2.2 per cent in 2026, while China’s growth is expected to slow from 4.9 per cent in 2025 to 4.4 per cent in 2026.
Perhaps more worrying was the outlook for the euro zone, where growth is forecast to fall sharply from 1.4 per cent in 2025 to just 0.9 per cent in 2026, a slowdown the World Bank attributes largely to tariff pressures and weaker industrial momentum. The report thus painted a picture of a world that is resilient, but slowing.
interconnected, but uneven.
While the World Bank laid out the macro canvas, country-level data this week filled in the details of each economy, revealing its own mix of strength and vulnerability.
US: steady inflation, solid spending
In the Western Hemisphere, particularly the United States, economic data dominated global attention. This came just after the country emerged from its longest-ever government shutdown, which had delayed key releases.
On Tuesday, US consumer inflation data showed that annual inflation held steady at 2.7 per cent still above the Federal Reserve’s 2 per cent target. While inflation did not spike, it also did not retreat significantly, keeping the Fed in a cautious mode.
Retail sales data told a different story: American consumers were still spending.
Retail sales rose by 0.6 per cent in December, beating expectations, driven largely by strong holiday demand. This suggested that the US economy remains consumption-driven and resilient, despite tighter monetary policy.
However, the delayed Producer Price Index (PPI) for November signalled underlying cost pressures. Wholesale inflation rose by 0.2 per cent, which economists warn could eventually feed into higher retail prices especially in an environment of rising tariffs.
The labour market, meanwhile, remained in what economists describe as a “low-hire, low-fire” phase. Initial jobless claims unexpectedly fell to 198,000 for the week ended January 10, lower than expected, but analysts caution that seasonal adjustments around year-end make the data noisy.
In sum, the US economy looks steady, not spectacularly cooling, but not collapsing.
India: low inflation, strategic trade
Back home, in what is now the world’s fastest-growing major economy, India began the week with its December inflation data. Retail inflation rose from 0.71 per cent in November to 1.33 per cent in December. The increase was benign and below expectations, largely because food prices remained in deflation. Core inflation, however, saw some pressure from higher gold and silver prices.
This print gives the Reserve Bank of India ample room to maintain a supportive policy stance when it meets for its first bi-monthly review on February 4—just three days after India’s Finance Minister Nirmala Sitharaman presents her ninth consecutive Union Budget.
Wholesale inflation in December climbed to 0.83 per cent, driven by higher prices of machinery, manufactured goods, minerals, food products and textiles. This suggests that input cost pressures are slowly building at the production level, even as consumer inflation remains contained.
On jobs, India’s unemployment rate in December inched up from 4.7 per cent to 4.8 per cent. Yet a more encouraging trend was the rise in female labor participation—a crucial long-term indicator for inclusive growth.
India’s quiet strategic message
India’s December trade data carried deeper implications than the headline numbers suggested. The merchandise trade deficit widened by 21.4 per cent to $25 billion. Exports grew by 1.9 per cent year-on-year, while imports jumped by 8.8 per cent.
But beneath this lay a more strategic story: tariffs have not weakened India’s export engine they have forced it to diversify.
One striking data point stood out: India’s exports to China surged 67 per cent to $2 billion in December, while exports to the US slipped by 1.8 per cent to $6.8 billion. This suggests that New Delhi is quietly recalibrating its trade relationships, reducing dependence on any single market.
The message was clear: India is not retreating from global trade; it is reshaping it.
United Kingdom: modest recovery, not revival
Across the Atlantic, the UK delivered a modest bit of good news. Its GDP grew by 0.3 per cent in November, outperforming expectations of just 0.1 per cent. This pulled the economy out of contraction and offered a brief respite from recession fears. Yet this was less a story of strength than of stabilisation. Britain is growing again but slowly, cautiously, and without momentum.
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