India likely to remain world's fastest-growing economy amid global uncertainty: IMF

India is likely to retain its position as the fastest-growing major economy in the world with 6.4 per cent economic growth in both 2026 and 2027, amid global uncertainty, as per data released by the International Monetary Fund's (IMF) World Economic Outlook Update in January 2026.

The IMF estimated India's economy to grow by 7.3 per cent in 2025, and 6.4 per cent for the next two years, significantly outshining global and advanced economy averages. Meanwhile, before easing slightly to 3.2 per cent in 2027, the world economy is expected to expand at 3.3 per cent in 2025 and 2026.

India's growth path remains stronger

India’s strong economic outlook is supported by solid domestic demand, continued public spending and a gradual pickup in private investment. In comparison with other major economies, India's growth path remains notably stronger. The United States is expected to expand at 2.4 per cent in 2026, China at 4.5 per cent, and the Euro Area by a modest 1.3 per cent.

India also continues to lead among emerging and developing economies in Asia, outperforming its regional peers and playing a key role in Asia’s projected growth of 5.0 per cent in 2026. The IMF said emerging market and developing economies overall are likely to grow at 4.2 per cent in 2026, well below India’s forecast pace.

"In India, growth is revised upward by 0.7 percentage point 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.

The IMF added that inflation in India is likely to return close to the target levels (2-6 per cent) after easing sharply in 2025, largely due to subdued food prices.

On the global front, the IMF noted that challenges from changing trade policies are being balanced by strong investment in technology, including artificial intelligence (AI), particularly in North America and Asia, along with fiscal and monetary support, generally supportive financial conditions, and adaptability of the private sector.