The International Monetary Fund (IMF) has raised India’s economic growth projection for 2025 by 0.7 percentage point to 7.3 per cent. In the World Economic Outlook update, the IMF said the upward revision reflects strong momentum in the fourth quarter of this fiscal year. Meanwhile, the IMF projected 6.4 per cent growth in the next financial year of 2026-2027, adding that despite the expected moderation, India remains a key driver of growth among emerging market and developing economies.
It said global growth is projected to hold steady at 3.3 per cent in 2026, supported by easing trade tensions, accommodative financial conditions and a surge in investment linked to technology, particularly artificial intelligence. The IMF said the inflation in India is expected to go back to near target levels after a marked decline in 2025, driven by subdued food prices, offering additional support to domestic demand. However, the IMF cautioned that AI-driven productivity gains could lead to a pullback in investment and tighter global financial conditions, with spillover effects for emerging economies.
