IMF Raises India FY2026 Growth Forecast to 7.3%, Sees Moderation Ahead

The International Monetary Fund (IMF) has raised its forecast for India’s economic growth in fiscal year 2026 by 0.7 percentage points to 7.3%, citing strong economic momentum. The upward revision follows India’s National Statistics Office recently increasing its FY2025 growth estimate to 7.4% for the year ending March 31, surpassing the government’s earlier projection range of 6.3% to 6.8%.

In its World Economic Outlook report released Monday, the IMF said the improved FY2026 outlook reflects a “better-than-expected outturn in the third quarter” and strong momentum continuing into the fourth quarter. IMF Communications Director Julie Kozack highlighted India’s role in the global economy, calling it a “key growth engine for the world,” noting that earlier IMF estimates had placed FY2026 growth at 6.6% in its Article IV staff report.

However, the IMF cautioned that India’s growth may ease to around 6.4% in the next two fiscal years as cyclical support fades. Globally, growth is projected at 3.3% in 2026 and 3.2% in 2027, with downside risks linked to U.S. tariffs and uncertainty, though the drag is expected to reduce over time. The IMF also forecast oil prices to remain low due to weak demand growth and strong supplies, while India’s inflation is expected to return near target levels after a sharp decline in 2025 driven by subdued food prices.

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