IMF lowers India's growth projection to 6.2% for 2025-26

The Indian economy is projected to grow at 6.2 per cent in 2025-26, slower than earlier estimated rate of 6.5 per cent, due to escalated trade tensions and global uncertainty, the International Monetary Fund (IMF) said on Tuesday.

"For India, the growth outlook is relatively more stable at 6.2 per cent in 2025, supported by private consumption, particularly in rural areas," IMF said in its World Economic Outlook (WEO).

India, which grew at 6.5 per cent in 2024-25, is projected to grow at 6.2 per cent in 2026-27, IMF said, adding that the growth rate is 0.3 percentage point lower than that in the January 2025 WEO update on "account of higher levels of trade tensions and global uncertainty".

According to the report, the global growth is projected at 2.8 per cent in 2025, lower by 0.5 percentage points estimated earlier. In 2026, the global economy is estimated to grow at 3 per cent.

For advanced economies, the report said that growth under the reference forecast is projected to drop from an estimated 1.8 per cent in 2024 to 1.4 per cent in 2025 and 1.5 per cent in 2026. Growth for 2025 is now projected to be 0.5 percentage point lower relative to that in January 2025 WEO update projections.

The forecasts for 2025 include significant downward revisions for Canada, Japan, the United Kingdom, and the United States and an upward revision for Spain.