IMF projects Indian economy to grow at 6.6% in 2025-26, outpacing China
- IBEF
- October 27, 2025
The International Monetary Fund (IMF), in its latest World Economic Outlook report, has projected India’s economy to grow at 6.6% in 2025-26, reaffirming its position as one of the fastest-growing emerging market and developing economies. The upward revision of 20 basis points from the previous estimate is attributed to a robust Q1 FY26 performance, which more than offset the impact of increased United States (US) tariffs on Indian exports. India is expected to outpace China, which is projected to grow at 4.8%. The IMF noted that despite trade policy shifts and global uncertainties, India’s domestic demand and resilient growth fundamentals continue to underpin its economic momentum.
The IMF, however, marginally lowered its 2026-27 forecast to 6.2%, anticipating a moderation in growth as the effects of early momentum ease. Global growth is projected at 3.2% in 2025, slowing to 3.1% in 2026, while inflation is expected to continue its downward trajectory. Among advanced economies, Spain is forecast to lead growth at 2.9%, followed by the United States at 1.9%. The IMF cautioned that prolonged trade tensions, protectionist policies, and labour market shocks could dampen the global outlook. It advised policymakers to rebuild fiscal buffers, maintain central bank independence, and strengthen structural reforms. India’s Economic Survey has projected gross domestic product (GDP) growth between 6.3% and 6.8% for FY26, with the government maintaining confidence in robust domestic consumption and a strong investment climate despite external headwinds.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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