New Delhi: The International Monetary Fund (IMF) Monday revised India’s growth forecast for the 2025-26 fiscal upward by 0.7 percentage points to 7.3 per cent, an improvement over its October 2025 estimate of 6.6 per cent, reinforcing the country’s position as one of the fastest-growing major economies.
The projection was released in the IMF’s World Economic Outlook report.
“In India, growth is revised upward by 0.7 percentage point to 7.3 percent for 2025, reflecting the better-than expected outturn in the third quarter (October-December) of the year and strong momentum in the fourth quarter (January-March),” the report reads.
The Fund has also marginally raised India’s growth estimate for 2026, to 6.4 percent from 6.2 percent, though it expects growth to remain at the same level in 2027 as some current drivers may fade.
The upward revision follows a similar reassessment by the World Bank, which recently pegged India’s growth at 7.2 percent for FY2026—an increase of 0.9 percentage points from its earlier estimate. The parallel revisions suggest growing confidence among multilateral institutions in India’s economic resilience.
The projection is similar to the government’s estimate. Latest figures released this month said India’s GDP (gross domestic product) was expected to grow 7.4 percent this fiscal year, up from last FY’s 6.5 percent.
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Global outlook
The IMF has also forecast a global economic growth of 3.3 percent in 2026 and 3.2 percent in 2027. The 2026 forecast has been revised upward by 0.2 percentage points compared to the October 2025 outlook, while the 2027 estimate remains unchanged.
The global economy is benefiting from supportive factors even as trade-related uncertainties persist, according to the IMF.
“Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector,” the report said.
Among advanced economies, the US is expected to grow by 2.4 percent in 2026, 0.3 percentage points higher than earlier estimates. The IMF attributes this improvement to supportive fiscal policy and lower policy rates, noting that the drag from higher trade barriers is easing.
The Euro area is projected to grow by 1.3 percent in 2026 and 1.4 percent in 2027, with increased public spending—particularly in Germany—and strong performance in Ireland and Spain contributing to the expansion.
China’s growth outlook has also been revised upward for 2026, by 0.3 percentage points to 4.5 percent. However, the IMF expects growth to slow to 4.0 percent in 2027 as structural challenges weigh on the economy.
“Growth for 2026 is also revised upward by 0.3 percentage point to 4.5 percent, reflecting the lower US effective tariff rates on Chinese goods as a result of the yearlong trade truce agreed to in November and stimulus measures that are assumed to be implemented over two years,” the report said.
Inflation prospects
The Fund sees global headline inflation easing from an estimated 4.1 percent in 2025 to 3.8 percent in 2026, and 3.4 percent in 2027. Core inflation in the US and Euro area is expected to hover around 2 percent by 2027 as tariffs gradually materialise.
“The inflation projections are also broadly unchanged from those in October and envisage inflation returning to target more gradually in the United States than in other large economies,” the report said.
While inflation is expected to edge up in China amid structural pressures, India’s inflation is projected to return to target levels after a sharp decline in 2025, supported largely by subdued food prices.
(Edited by Prerna Madan)
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Indianexpres reports its dropping 6.3 as per the IMF prdictions , which is the truth…