IMF raises India’s FY26 GDP growth forecast to 7.3 pc

The International Monetary Fund (IMF) has raised India’s economic growth projection for the 2025–26 fiscal year to 7.3 per cent, citing stronger-than-expected performance and sustained momentum in recent quarters. The revised estimate is 0.7 percentage point higher than the IMF’s October 2025 forecast.

In its latest World Economic Outlook update released on Monday, the Washington-based multilateral lender also increased India’s GDP growth estimate for 2026–27 to 6.4 per cent, up from the earlier projection of 6.2 per cent. The IMF attributed the upward revision to robust economic activity, particularly a better-than-anticipated outcome in the third quarter and strong momentum continuing into the fourth quarter of the current fiscal.

The IMF noted that while growth remains solid, it is expected to moderate to around 6.4 per cent in 2026–27 and 2027–28 as cyclical and temporary factors begin to fade.

Official data from the Ministry of Statistics and Programme Implementation shows that India’s GDP grew by 8 per cent during the April–September period of 2025–26, supported by a strong 8.2 per cent expansion in the July–September quarter. According to the First Advance Estimates, the Indian economy is projected to grow by 7.4 per cent in the current fiscal year, compared with 6.5 per cent growth recorded in 2024–25.

On inflation, the IMF said price pressures in India are expected to ease back towards target levels following a notable decline in 2025, largely due to subdued food prices. The Reserve Bank of India aims to keep headline consumer price inflation at 4 per cent, with a tolerance band of 2 per cent on either side.

Globally, the IMF projected steady growth of 3.3 per cent in 2026 and 3.2 per cent in 2027. Growth in emerging market and developing economies is expected to remain just above 4 per cent, while China’s 2025 growth forecast has been marginally raised to 5 per cent. Global inflation is seen gradually declining through 2027.