IMF raises FY26 growth forecast to 7.3% from 6.6%

NEW DELHI: The IMF on Monday raised India's GDP growth estimates for 2025-26 to 7.3% from the earlier projection of 6.6% due to strong third and fourth quarter expansion. The latest estimate is slightly below the 7.4% growth projected by the country's statistics office for the current fiscal year that ends in March and matches the 7.3% estimated by RBI.

The World Bank has also recently revised upwards its growth estimates for India from 6.3% to 7.2%, citing robust demand due to strong consumption on the back of tax cuts and higher rural income.





"In India, growth is revised upward by 0.7 percentage point to 7.3% for 2025, reflecting the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter," the IMF's World Economic outlook update.

"Growth is projected to moderate to 6.4% in 2026 and 2027 as cyclical and temporary factors wane," the multilateral agency said in its latest report.

India retains the fastest growing major economy tag as China's growth has been projected at 5% in 2025-26 and 4.5% next year and 4% in 2027. Several agencies, economists and brokerages have raised India's GDP growth forecast for FY26.