IMF raises India’s GDP growth forecast for FY26 to 6.6%

The International Monetary Fund (IMF) on Tuesday revised upwards India’s GDP growth forecast for the current fiscal to 6.6%, from its earlier estimate of 6.4%, citing strong economic momentum that has offset the impact of US tariffs on Indian exports. In its latest World Economic Outlook (WEO) report, the multilateral agency also lowered its projection for 2026–27 by 20 basis points to 6.2%.

“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 IMF said. India’s economy grew 7.8% in the April–June quarter, the highest in five quarters, before the US imposed additional tariffs on Indian goods.

Earlier this month, the World Bank also raised its growth forecast for India to 6.5% for the current fiscal, up from 6.3% estimated earlier, reaffirming India’s position as the world’s fastest-growing major economy. In July, the IMF had projected India’s growth at 6.4% for both 2025 and 2026. In its April 2025 outlook, the estimates stood at 6.2% for 2025 and 6.3% for 2026.

Globally, the IMF said growth is projected to slow from 3.3% in 2024 to 3.2% in 2025 and further to 3.1% in 2026. While this marks a slight improvement over the July update, it remains 0.2 percentage points below pre-policy shift forecasts in the October 2024 WEO, with the slowdown attributed to uncertainty and protectionist policies. For emerging market and developing economies, the IMF projected growth to moderate from 4.3% in 2024 to 4.2% in 2025 and 4% in 2026.
(With PTI inputs)