IMF raises FY26 growth forecast for India to 6.4%; still below RBI's estimate

In India, growth is projected to be 6.4% in 2025 and 2026, with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast.

The International Monetary Fund (IMF), in its latest World Economic Outlook (WEO) update for July 2025, has projected India’s economy to grow at 6.4% in 2025-26 and 2026-27. The latest estimates represent an upward revision of 20 basis points for FY26 and 10 basis points for FY27 from the IMF's April 2025 forecast.

"In India, growth is projected to be 6.4 percent in 2025 and 2026, with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast," the IMF said on India's economy.

For FY27, the IMF estimates India's economy to grow at 6.4%.

The IMF's current forecast for India remains below the RBI's GDP growth forecast for 2025–26, which in its April update was projected at 6.5%. RBI Governor Sanjay Malhotra, in its policy address, however, said while the risks are evenly balanced around the baseline projections, uncertainties "remain high" in the wake of the recent spike in global volatility.

In emerging markets and developing economies, growth is expected to be 4.1% in 2025 and 4% in 2026. Relative to the forecast in April, growth in 2025 for China is revised upward by 0.8 percentage point to 4.8%. The revision reflects stronger-than-expected activity in the first half of 2025 and the significant reduction in US–China tariffs.

The GDP outturn in the first quarter of 2025 alone implies a mechanical upgrade to the growth rate for the year of 0.6 percentage points.

In other advanced economies, growth is projected to decelerate to 1.6% in 2025 and pick up to 2.1% in 2026.

Growth in advanced economies is projected to be 1.5% in 2025 and 1.6% in 2026. In the United States, with tariff rates settling at lower levels than those announced on April 2 and looser financial conditions, the economy is projected to expand at a rate of 1.9% in 2025.

The global financial agency says the global growth is projected at 3% for 2025 and 3.1% in 2026. The forecast for 2025 is 0.2 percentage points higher than that in the reference forecast of April 2025 and 0.1 percentage points higher for 2026.

The IMF adds that the global headline inflation is expected to fall to 4.2% in 2025 and 3.6% in 2026, a path similar to the one projected in April.