&imwidth=800&imheight=600&format=webp&quality=medium "IMF raises India’s growth forecast to 7.3% in current fiscal; predicts sharp drop next year")
The International Monetary Fund (IMF) on Monday (Jan 19) upwardly revised India's economic growth projections for the current financial year (FY26) to 7.3 per cent from its earlier forecast of 6.6 per cent. The rise in growth figures is attributed to the "better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter,” the IMF said.
The multilateral agency estimated a sharp drop in India's GDP growth in FY 27 and FY 28 to moderate at 6.4 per cent. The country will retain its position as the world's fastest-growing major economy, outperforming global and advanced economy averages.
IMF said inflation in India is expected to go back to near target levels (2-6 per cent) after a marked decline in 2025, driven by subdued food prices.
In its latest World Economic Outlook, the IMF also upgraded its estimates for global economic growth for calendar years 2025 and 2026 to 3.3%, from 3.2% and 3.1%, respectively, in October. For 2027, it forecast 3.2% growth. However, it cautioned that over-optimism about about arteficial intellignece coupled with rising trade and geopolitical tensions can lead to a sharp market crash and disruption in the global economy.
The IMF noted that emerging market and developing economies as a group are expected to grow at 4.2 per cent in 2026, while advanced economies as a bloc are estimated to grow at 1.8 per cent.
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India's growth figures released at the end of November 2025 surprised experts as the GDP growth unexpectedly surged to 8.2 per cent in the July-September quarter, surpassing earlier estimates. Based on the high figures, the Reserve Bank of India revised its growth forecast for teh the current financial year to 7.3 per cent. Earlier this month, the Ministry of Statistics and Programme Implementation (MoSPI) released the first advance estimate of GDP growth for 2025-26, pegging it at 7.4%. This implies a slowdown in growth to 6.9% in the second half of the year, from 8% in the first half.
