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IMF Raises India’s Growth Forecast to 6.4% for FY26 and FY27 Amid Improved Global Outlook.

Economy Business | Dated: 30 Jul 2025

In its July 2025 update to the World Economic Outlook, the International Monetary Fund (IMF) revises India’s GDP growth projection upward to 6.4% for both Fiscal Year 2025‑26 and 2026‑27—up from 6.2% and 6.3% in the April forecast. The upgrade reflects a more favourable external environment and strong domestic reform momentum.

🎯 Key Highlights:

  • - The IMF raised India’s growth forecast by 20 basis points in FY26 and 10 basis points in FY27, attributing the upward revision to factors such as easing global tariffs, improved financial conditions including a weaker U.S. dollar, and sustained reform efforts boosting consumption and public investment.
  • - Globally, the IMF now projects 3.0% GDP growth in 2025 and 3.1% in 2026, also revising emerging markets’ growth to 4.1% for 2025 and 4.0% for 2026. China’s forecast was lifted to 4.8%, contributing to a more benign environment for global trade and capital flows.
  • - The revised forecast cements India’s position as the world’s fastest-growing major economy. Despite global slowdowns, IMF affirms India's growth trajectory ahead of peers like China and the U.S., reinforcing investor confidence in India's economic fundamentals.

💡 Other Important Facts:

  • (i) The IMF warned that renewed tariff tensions or fiscal slippages could derail momentum, leading to inflationary pressures and tightening financial conditions. It emphasized the need for continued structural reforms in education, labor markets, land policies, and regulatory ease to sustain growth.
  • (ii) To build on the revised forecast, IMF recommends India to enhance job creation through upskilling agricultural labor, sustain infrastructure investments, and promote digital and manufacturing reforms—all of which underpin India’s long-term growth and inclusion agenda.

📚 Test Your Knowledge:

What is the recent GDP growth forecast for India for 2025 and 2026 as per the International Monetary Fund (IMF)?

Correct Answer: 6.4%

🚀 Quick Recap: