IMF raises India’s FY26 GDP growth projection to 7.3%

The IMF 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 was 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-based headline inflation at 4 per cent, with a margin of 2 per cent on the either side.