New Delhi: The International Monetary Fund (IMF) has revised its GDP growth forecast for India upwards to 6.6% for the current fiscal year (2025–26), reflecting a strong start to the year that outweighed the impact of recently imposed US tariffs. This is a 20 basis point increase from the IMF’s July 2025 projection of 6.4%.
The revision was announced in the IMF’s latest World Economic Outlook (WEO) report released Tuesday. The multilateral lending institution cited robust Q1 growth — 7.8% in April–June, the highest in five quarters — as the key factor behind the upgrade. However, the forecast for FY2026–27 has been lowered to 6.2%, down from the earlier estimate of 6.4%, indicating expectations of a gradual slowdown due to global headwinds.
“Compared with the July WEO Update, this is an upward revision for 2025, with carryover from a strong first quarter more than offsetting the increase in the US effective tariff rate on imports from India since July,” the IMF said.
Global Growth Outlook Remains Subdued
While India’s growth outlook remains positive, the IMF projected global growth to slow from 3.3% in 2024 to 3.2% in 2025, and further to 3.1% in 2026. The deceleration is attributed to rising protectionism, global uncertainty, and softer recovery among major economies.
For emerging markets and developing economies, the growth rate is expected to decline gradually from 4.3% in 2024 to 4.0% in 2026.
Read also: RBI Officers Appointed to IMF Advisory Roles — Meet Dr. Pankaj Kumar and Dr. Dirghau Raut
India Still Fastest-Growing Major Economy
Earlier this month, the World Bank also upgraded India’s GDP forecast to 6.5% for FY2025 from its previous estimate of 6.3%, reaffirming India’s position as the fastest-growing major economy in the world.
India’s resilience in the face of external shocks, particularly trade tensions and policy shifts in the US, has been underpinned by strong domestic demand, improved investment climate, and robust public infrastructure spending.
Conclusion
Despite global economic uncertainties and recent protectionist moves, India continues to show strong economic momentum. The upward revision by the IMF highlights the country’s resilience and growing role in driving global economic growth.
