Despite global uncertainties and tariff tensions, the International Monetary Fund (IMF) has raised its growth forecast for India’s economy in fiscal year 2026 by 0.7 percentage points to 7.3 per cent. The IMF estimates India's economy to grow by 7.3 per cent in 2025, followed by 6.4 per cent in both 2026 and 2027, significantly outperforming global and advanced economy averages.
"In India, growth is revised upward by 0.7 percentage points to 7.3 per cent for 2025, reflecting the better-than expected outturn in the third quarter of the year and strong momentum in the fourth quarter. Growth is projected to moderate to 6.4 per cent in 2026 and 2027 as cyclical and temporary factors wane," the IMF said.
For calendar years 2026 and 2027, the International Monetary Fund forecast growth of 6.3 per cent and 6.5 per cent, respectively.
World economy projected to expand at 3.3%
The 191-nation lending organisation expects that global growth will come in at 3.3 per cent this year, the same as in 2025 but up from the 3.1 per cent it had forecast for 2026 back in October.
India's robust outlook is underpinned by resilient domestic demand, sustained public investment, and a gradual recovery in private capital expenditure.
Compared to other major economies, India's growth trajectory remains notably stronger: the United States is projected to grow at 2.4 per cent in 2026, China at 4.5 per cent, and the Euro Area at a modest 1.3 per cent.
India outpaces regional peers
Among emerging and developing Asian economies, India continues to lead, outpacing regional peers and contributing significantly to Asia's projected 5.0 per cent growth in 2026.
The IMF notes that emerging market and developing economies as a group are expected to grow at 4.2 per cent in 2026, well below India's projected pace.
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