Budget Speech 2026

Honourable Members, allow me to turn to the global and domestic economic outlook.

Global outlook

The global economy is projected to grow by 3.3 per cent in 2026, broadly in line with last year’s outcome.

Advanced economies are expected to grow moderately, while emerging markets will continue to anchor global momentum. India and Sub-Saharan Africa in particular, are forecast to grow more strongly, supported by resilient domestic demand.

These developments are unfolding within an unprecedented global trade environment characterised by persistent geopolitical tensions and shifting trade policies which are reshaping supply chains.

In response we need to diversify our trading portfolios, secure new markets, reduce vulnerability to external shocks and position ourselves to benefit from emerging global growth centers.

Domestic outlook

On the domestic front, our growth outlook is steadily improving.

We project real economic growth of 1.6 per cent in 2026, an improvement from the 1.4 per cent estimated in 2025.

This improvement reflects the continued strengthening of economic performance from the second half of 2025.

Over the medium term, growth is expected to average 1.8 per cent, reaching 2 per cent by 2028.

Persistent logistics bottlenecks, weak public infrastructure and the recent outbreak of foot-and-mouth disease continue to weigh on economic activity and pose risks to the outlook.

In light of this, rapid inclusive growth remains our only durable path forward.

Our efforts to promote faster economic growth continue to revolve around the four pillars:

These pillars are the foundation upon which inclusivity is built, and how we ensure that growth is faster.