IMF Revises India’s FY26 Growth 0.7 pp To 7.3 pc
This reflects the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter. The FY28 forecast of 6.4 per cent has been retained
Chennai: The International Monetary Fund has revised the growth upward 0.7 percentage points to 7.3 per cent for FY26 and 0.2 percentage points upward to 6.4 per cent for FY27.
In India, growth is revised upward by 0.7 percentage points from its October forecast of 6.6 per cent to 7.3 per cent for the current year. This reflects the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter. The FY28 forecast of 6.4 per cent has been retained.
Even in the October forecast, the IMF had raised India’s GDP forecast for the current fiscal by 0.2 percentage points to 6.6 per cent due to a strong first quarter but had reduced the projection for next fiscal by 0.2 percentage points to 6.2 per cent from its July forecast due to the US tariff impact.
“Growth is projected to moderate to 6.4 percent in 2026 and 2027 as cyclical and temporary factors wane,” IMF said in its report.
India had clocked GDP growth of over 8 per cent in the first half of the year. The impact of US tariffs on the merchandise exports also have been less than anticipated. Further, in its first advance estimates released on January 6, the government pegged FY26 growth at 7.4 per cent. The World Bank too had recently raised its FY26 growth estimate for India to 7.2 per cent and projected growth of about 6.5 percent for FY27, considering stronger domestic demand and resilience in consumption.
The IMF has revised its 2026 global growth forecast upward to 3.3 per cent from 3.1 per cent projected in October. Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence, more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector,” it said.
Meanwhile, IMF has projected inflation in India to go back to near target levels after a marked decline in 2025 driven by subdued food prices.
