IMF Maintains India’s GDP Growth Forecast at 6.5% for FY26 and FY27 Amid Global Economic Uncertainty
New Delhi, January 18: The International Monetary Fund (IMF) has retained its growth forecast for India’s Gross Domestic Product (GDP) at 6.5% for both fiscal year 2026 and fiscal year 2027. This projection was confirmed in the IMF’s latest World Economic Outlook (WEO) report.
In the report, the global financial institution emphasized that India’s economic growth is expected to remain robust, with a 6.5% growth rate in 2025 and 2026, which aligns with the country’s potential. However, the IMF also highlighted that the pace of India’s GDP growth has slowed more than anticipated, primarily due to a sharper-than-expected deceleration in industrial activity.
India’s economic performance faced a slowdown in the second quarter of the current fiscal year, with GDP growth dropping to 5.4% compared to 6.7% in the same period the previous year. Despite this moderation, India remains the world’s fastest-growing major economy, with a recorded GDP growth rate of 8.4% for fiscal year 2024.
The Finance Ministry’s November economic review noted that while there are new uncertainties surrounding global trade for fiscal year 2026, India’s economic outlook remains cautiously optimistic. The report suggested that growth in the second half of fiscal year 2025 is expected to outperform the first half, buoyed by promising indicators in key sectors during the third quarter.
Additionally, the report pointed out challenges posed by the strong US dollar and potential policy rate adjustments in the United States, which are exerting pressure on emerging market currencies, including India’s.
On a global scale, the IMF has forecasted a modest global growth rate of 3.3% for both 2025 and 2026, which is below the historical average of 3.7% observed between 2000 and 2019. This projection remains largely unchanged from the October 2024 WEO, with the upward revision in the US economy offsetting downward revisions in other major economies.
As global growth prospects remain subdued, India’s economic resilience continues to be a focal point in the global landscape.
