The International Monetary Fund (IMF) revised its projections upward in its World Economic Outlook released on January 19, indicating that India’s economy is expected to develop faster than previously projected in both the current and future fiscal years.
India’s GDP is predicted by the IMF to grow by 7.3% in FY26, an increase of 0.7 percentage points above its October estimate. Additionally, growth for FY27 has been pushed up from the previous projection of 6.2 percent to 6.4 percent. In FY28, the Fund anticipates growth to settle at about 6.4 percent as cyclical and transient supports wane.
“In India, growth is revised upward by 0.7 percentage points to 7.3 percent for 2025, reflecting the strong momentum in the fourth quarter and the better-than-expected outturn in the third quarter of the year,” the IMF stated. It also stated that when the boost from favorable base effects and short-term drivers wanes, growth is expected to decline in the upcoming years.
In the first half of the year, India’s economy astonished everyone by growing at a rate of more than 8%. The government projected FY26 growth at 7.4 percent in its first advance projections, which were made public on January 6. This estimate was mostly consistent with the IMF’s updated assessment.
The World Bank conducted a similar reevaluation before the IMF upgrade. Citing increased domestic demand and resilient consumption, the Washington-based lender recently increased its FY26 growth estimate for India to 7.2 percent and projected growth of roughly 6.5 percent beyond that.
Additionally, the IMF has become more upbeat about the world economy. In order to match the pace observed in 2025, it increased its prediction for global growth in 2026 from 3.1 percent in October to 3.3 percent.
The IMF now projects that the US economy will rise by 2.4% in 2025, up from 2.1% previously. The Fund has increased its 2026 forecast by 0.3 percentage points from previous estimates, with China expected to grow 4.5 percent while slowing from 5 percent.
