India a key global growth engine says IMF after country's 7.8% growth beats expectations

India’s economy has shown resilience despite the energy price shock, with real GDP growth of 7.8% in the April-June quarter of FY27 coming in above expectations, the International Monetary Fund (IMF) said. The Fund also welcomed changes to India’s statistical framework, saying new economic indicators should help improve GDP estimates.

IMF Communications Department Director Julie Kozack said India’s latest growth performance was higher than both the IMF staff’s expectations and the consensus among other observers.

Services, exports drive growth surprise

“India's real GDP in the second quarter grew by 7.8 per cent. That was above our staff's expectations and also the consensus among other observers. This upward surprise was driven by stronger-than-expected activity in the services sector, and also in exports,” Kozack said at the IMF’s monthly briefing.

She said the latest outcome demonstrated the resilience of the Indian economy amid external pressures.

“I think what we would say is the outcome also underscores the resilience of the Indian economy, despite the energy price shock. And it also means that, as we've been saying for quite some time, that India does remain a key growth engine for the world,” Kozack said.

According to data released by the Ministry of Statistics and Programme Implementation (MoSPI), real GDP was estimated at Rs 81.36 lakh crore in Q1 FY27, compared with Rs 75.46 lakh crore in the corresponding quarter of FY26. The 7.8% expansion was also higher than the Reserve Bank of India’s earlier 7% growth estimate for the quarter.

GDP numbers face scrutiny over methodology

The IMF’s assessment comes amid a debate over the methodology and credibility of India’s GDP estimates. Former Finance Secretary Subhash Chandra Garg had questioned the 7.8% growth figure, arguing that revisions to the previous year’s current-price GDP affected the comparison.

Garg said GDP at current prices had been revised from around Rs 86 lakh crore to Rs 80 lakh crore and claimed that, without the revision, growth would have been around 2.6%.

Chief Economic Adviser V Anantha Nageswaran, however, termed the approach “cherry-picking” of data and said the latest GDP estimates reflected a revised methodology, with the financial year ending March 2023 used as the new base.

IMF backs changes to statistical framework

Against this backdrop, the IMF backed India’s efforts to modernise its macroeconomic statistics, specifically pointing to the new Index of Industrial Production (IIP) and Producer Price Index (PPI) series.

“The latest GDP release that we just talked about incorporated both a new index of industrial production, and a new producer price index series, and those two new series should help improve India's GDP estimates,” Kozack said.

“We welcome these important steps that India is taking to modernise its macroeconomic statistics. And we, of course, encourage the authorities to continue to further strengthen the statistical framework and data quality along the lines that they're progressing,” she added.