The IMF has raised India’s GDP progress projection for FY26 to six.6%, highlighting the economic system’s resilience towards US tariff pressures. Whereas international progress is anticipated to sluggish within the coming years, India continues to guide because the world’s fastest-growing main economic system.
The Worldwide Financial Fund (IMF) has revised India’s GDP progress forecast for 2025-26 to six.6 per cent, up from its earlier estimate of 6.4 per cent, citing robust financial momentum that has helped offset the impression of US tariffs on Indian exports. The replace got here as a part of the IMF’s newest World Financial Outlook (WEO) report launched on Tuesday. “In contrast with the July WEO Replace, that is an upward revision for 2025, with carryover from a robust first quarter greater than offsetting the rise within the US efficient tariff fee on imports from India since July, and a downward revision for 2026,” the report mentioned.
Progress momentum amid tariff challenges
India’s economic system recorded a sturdy 7.8 per cent progress within the April–June quarter, marking the strongest efficiency in 5 quarters earlier than the US imposed new tariffs on Indian items. The IMF’s upward revision displays resilience in home demand, manufacturing exercise and continued government-led capital spending. Earlier this month, the World Financial institution additionally raised India’s GDP forecast for the present fiscal to six.5 per cent, up from 6.3 per cent, reiterating that India will stay the world’s fastest-growing main economic system within the close to time period.
Slight moderation anticipated in 2026-27
Whereas the IMF has turned extra optimistic for the continuing fiscal yr, it has barely lowered India’s GDP forecast for 2026-27 to six.2 per cent, trimming it by 20 foundation factors from its earlier projection. In its July 2025 outlook, the IMF had projected India’s GDP progress at 6.4 per cent for each 2025 and 2026. Earlier in its April 2025 report, it forecasted 6.2 per cent progress for 2025 and 6.3 per cent for 2026.
World progress outlook turns cautious
On the worldwide entrance, the IMF projected world progress to sluggish from 3.3 per cent in 2024 to three.2 per cent in 2025 and additional to three.1 per cent in 2026. The report famous that whereas this marks a slight enchancment from the July replace, it stays 0.2 share factors decrease than pre-policy-shift forecasts made in October 2024. The IMF attributed this slowdown to protectionist insurance policies, commerce uncertainties, and broader macroeconomic headwinds, although it mentioned the tariff shock was smaller than initially anticipated. For rising and growing economies, progress is prone to ease from 4.3 per cent in 2024 to 4.2 per cent in 2025 and 4 per cent in 2026.