IMF Raises India’s FY26 Growth Forecast to 6.4% Citing Lower Inflation and Strong Reforms
IMF India growth forecast for FY2025-26 has been raised to 6.4%, up from the previous estimate of 6.2% announced in April. The upward revision in the International Monetary Fund’s latest World Economic Outlook update reflects lower inflation, a more favorable external environment and continued economic reforms. The IMF has also raised its FY2026-27 GDP growth forecast to 6.4%, highlighting the resilience of India’s economy and its growth prospects.
The report also upgraded India’s FY2026-27 GDP growth estimate by 10 basis points to 6.4%, signaling sustained momentum over the medium term.
“In India, growth is projected to be 6.4 percent in [FY 2026 and FY 2027], with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast,” the IMF stated.
Responding to questions on the rationale behind the revision, Deniz Igan, Division Chief at the IMF, cited the suspension of higher tariffs and a drop in food prices that contributed to lower inflation. Additionally, she emphasized the role of structural reforms, consistent consumption growth, and continued public investment in maintaining stable economic expansion.
These factors collectively underpin India’s resilient economic outlook and reinforce investor confidence moving forward.
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