IMF Raises India’s FY26 GDP Growth Forecast to 6.6% Amid Strong Economic Momentum
Despite U.S. tariff impact, IMF cites robust first-quarter performance as key driver of upward revision.
New Delhi (PTI): The International Monetary Fund (IMF) has raised India’s GDP growth forecast for 2025-26 to 6.6%, revising its earlier estimate of 6.4%. The upward revision reflects the strong momentum from the first quarter of FY26, which the IMF says has more than offset the impact of recently imposed U.S. tariffs on Indian exports.
The update was part of the IMF’s latest World Economic Outlook (WEO) released on Tuesday. However, the agency slightly lowered India’s growth projection for FY27 to 6.2%, a 20 basis point drop from its previous forecast.
“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 noted.
India’s economy recorded a 7.8% growth in the April–June quarter, the fastest in the last five quarters. The strong performance came just before the U.S. introduced increased tariffs on some Indian goods.
Earlier in October, the World Bank also upgraded India’s FY26 growth forecast to 6.5%, up from 6.3%, maintaining that India will likely remain the fastest-growing major economy globally.
The IMF’s growth estimates for India have been adjusted multiple times over the past year. In July, the agency projected 6.4% growth for both FY26 and FY27, while in its April 2025 report, it had forecast 6.2% for FY26 and 6.3% for FY27.
Global Economic Outlook
Globally, the IMF expects growth to decelerate from 3.3% in 2024 to 3.2% in 2025, and further to 3.1% in 2026. While this is a modest improvement over the July forecast, the figures still fall short of earlier expectations due to rising uncertainty and trade protectionism. The report also noted that the impact of U.S. tariffs has been smaller than initially feared.
For emerging markets and developing economies, growth is expected to slow from 4.3% in 2024 to 4.2% in 2025, and 4% in 2026.
The IMF’s report emphasizes the need for countries to strengthen policy frameworks, resist protectionist tendencies, and maintain fiscal discipline to navigate global economic headwinds.
