The International Monetary Fund (IMF) has revised India's GDP growth forecast for 2025-26 to 6.6 per cent, up from its earlier estimate of 6.4 per cent, citing strong economic momentum that has helped offset the impact of US tariffs on Indian exports. The update came as part of the IMF's latest World Economic Outlook (WEO) report released on Tuesday. "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, and a downward revision for 2026," the report said.
Growth momentum amid tariff challenges
India's economy recorded a robust 7.8 per cent growth in the April–June quarter, marking the strongest performance in five quarters before the US imposed new tariffs on Indian goods. The IMF's upward revision reflects resilience in domestic demand, manufacturing activity and continued government-led capital spending. Earlier this month, the World Bank also raised India's GDP forecast for the current fiscal to 6.5 per cent, up from 6.3 per cent, reiterating that India will remain the world's fastest-growing major economy in the near term.
Slight moderation expected in 2026-27
While the IMF has turned more optimistic for the ongoing fiscal year, it has slightly lowered India's GDP forecast for 2026-27 to 6.2 per cent, trimming it by 20 basis points from its previous projection. In its July 2025 outlook, the IMF had projected India’s GDP growth at 6.4 per cent for both 2025 and 2026. Earlier in its April 2025 report, it forecasted 6.2 per cent growth for 2025 and 6.3 per cent for 2026.
Global growth outlook turns cautious
On the global front, the IMF projected world growth to slow from 3.3 per cent in 2024 to 3.2 per cent in 2025 and further to 3.1 per cent in 2026. The report noted that while this marks a slight improvement from the July update, it remains 0.2 percentage points lower than pre-policy-shift forecasts made in October 2024. The IMF attributed this slowdown to protectionist policies, trade uncertainties, and broader macroeconomic headwinds, though it said the tariff shock was smaller than initially expected. For emerging and developing economies, growth is likely to ease from 4.3 per cent in 2024 to 4.2 per cent in 2025 and 4 per cent in 2026.
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