Source: FE
Context:
The International Monetary Fund (IMF) revised India’s gross domestic product (GDP) growth forecast for FY26 to 6.6%, up 20 basis points from its previous projection of 6.4%, citing a robust first-quarter performance that offset the impact of US interest rate hikes. The FY27 forecast was also revised upward to 6.2%.
Key Highlights:
- Strong Domestic Momentum: Private sector growth and technology adoption remain key drivers of India’s economic expansion.
- Global Comparison: India continues to be projected as the world’s fastest-growing major economy, supported by resilient consumption.
- External Factors: Despite trade challenges, including a 50% US tariff on labour-intensive exports (textiles, footwear, marine products), the Indian economy has shown resilience.
- Global Growth Outlook: The IMF raised the global growth projection for 2025 by 20 bps to 3.2%, while 2026 remains at 3.1%.
Other Forecasts for India (FY26 GDP Growth %):
| Institution | Earlier | Current |
|---|---|---|
| World Bank | 6.3 | 6.5 |
| OECD | 6.3 | 6.7 |
| S&P Global | 6.5 | 6.5 |
| ADB | 6.5 | 6.5 |
| RBI | 6.5 | 6.8 |
| IMF | 6.4 | 6.6 |
