The International Monetary Fund (IMF) has raised its GDP growth forecast for India to 7 percent for 2026-27 as compared to 6.4 percent projected in July. The estimate has been increased on back of ‘stronger-than-expected momentum, supported by resilient domestic demand and robust services activity.’
“India stands out with upward revisions, reflecting sustained momentum and growing evidence of stronger growth potential supported by favourable demographic dynamics, a large and expanding domestic market, and continued structural reforms,” the IMF stated in its flagship World Economic Outlook report.
However, the report also highlighted how the negative supply shock from the war in West Asia is making its way through the world economy. The IMF’s latest projection reflected how the private sector has adjusted well to the conflict and trade-related shocks, however also mentioned that the “possibility of larger economic costs” is becoming “more palpable”. This is because the conflict is dragging on and buffers are becoming narrower.
Countries that are now projected to grow at a significantly higher rate in 2026 than in July include Germany (1.3% versus 0.7%) and UK (1.3% versus 1%). In fact, advanced economies are projected to grow 2.1% in 2026 as compared to 1.7% before. The marking down of growth for emerging markets and developing economies was seen for China, Russia, Brazil, and West Asian countries expected to either expand at a weaker pace or contract.
IMF Raises India’s GDP Growth Forecast To 7%, Warns Of Global Economic Uncertainty
