New Delhi: The International Monetary Fund on Monday raised India’s growth projection to 7.3 per cent for fiscal 2025-26, up 0.7 percentage point from its October forecast, on the back of better-than-expected performance of the economy.
The Washington-headquartered multilateral lending agency has also revised India’s Gross Domestic Product (GDP) growth forecast to 6.4 per cent for fiscal year 2026-27 beginning April 1, 2026, from its earlier estimate of 6.2 per cent.
“In India, growth is revised upward by 0.7 percentage point to 7.3 per cent for 2025 (fiscal FY26), reflecting the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter,” it said in its World Economic Outlook (WEO) update.
Growth is projected to moderate to 6.4 per cent in 2026-27 and 2027-28 as cyclical and temporary factors wane, the International Monetary Fund (IMF) said.
According to India’s statistics ministry, GDP during April-September of 2025-26 registered a growth rate of 8 per cent, on the back of a robust 8.2 per cent growth in July-September period.
The Indian economy is likely to expand by 7.4 per cent in the current fiscal, according the First Advance Estimates released by Ministry of Statistics and Programme Implementation (MoSPI). The growth during 2024-25 fiscal was 6.5 per cent.
On inflation, IMF said it is expected to go back to near target levels after a marked decline in 2025 driven by subdued food prices.
The Reserve Bank has a target to maintain consumer price index (CPI) based headline inflation at 4 per cent, with a margin of 2 per cent on the either side.
The IMF update further said that the an unexpectedly sturdy world economy is likely to shrug off President Donald Trump’s protectionist trade policies this year, thanks partly to a surge of investment in artificial intelligence in North America and Asia, the International Monetary Fund said in a report out Monday.
The 191-nation lending organisation expects that global growth will come in at 3.3 per cent this year, same as in 2025 but up from from the 3.1 per cent it had forecast for 2026 back in October.
The world economy “continues to show notable resilience despite significant US-led trade disruptions and heightened uncertainty,’’ IMF chief economist Pierre-Olivier Gourinchas and his colleague Tobias Adrian wrote in a blog post accompanying the latest update to the fund’s World Economic Outlook.
The US economy, benefiting from the strongest pace of technology investment since 2001, is forecast to expand 2.4 per cent this year, an upgrade on the fund’s October forecast and on expected 2025 growth — both 2.1 per cent.
China — the world’s second-largest economy — is forecast to see 4.5 per cent growth, an improvement on the 4.2 per cent the IMF had predicted October, partly because a trade truce with the United States has reduced American tariffs on Chinese exports.