Washington, October 13 (Daily Kiran) : The International Monetary Fund (IMF) has raised its economic growth forecast for India, projecting a 7% growth rate for the fiscal year 2026-27. This positions India among the fastest-growing major economies globally.
In its October 2026 World Economic Outlook (WEO) report, the IMF noted that India’s growth is expected to remain at 7% for both 2027 and 2028. This new estimate is an increase of 0.6 percentage points from the July 2026 update and 0.5 percentage points higher than the April 2026 forecast. The projections for 2028 have also been adjusted upwards by 0.3 percentage points compared to July and 0.5 percentage points from April.
The report highlighted that India’s economy grew by 7.8% in 2025. For 2026, the IMF anticipates a growth rate of 7.4%, followed by a 7% growth in 2027.
The IMF attributes this positive outlook to robust domestic demand and a strong service sector. Despite high oil prices, economic activities in India have remained resilient, driven by domestic consumption and services.
Unlike many emerging economies facing downward revisions due to conflicts in the Middle East and rising energy prices, India’s growth forecast has been upgraded. The IMF cites favorable demographic trends, a large and expanding domestic market, and ongoing structural reforms as key factors behind this optimistic projection.
Additionally, the IMF expects consumer price inflation (CPI) in India to be around 5% in 2026, up from 2% in 2025, before declining to 4.4% in 2027.
The current account deficit is projected to be 1.5% of GDP in 2026 and 1.3% in 2027, an increase from 0.7% in 2025.
On the fiscal front, the IMF has noted India’s relatively strong position compared to other developed and emerging economies. While many nations will need to tighten fiscal policies to stabilize their debt-to-GDP ratios post-pandemic, India is in a better situation.
The report also highlights India’s recent trade agreements, particularly with the European Union and the United Kingdom, which are expected to reduce tariff and non-tariff barriers, strengthen supply chains, and enhance trade.
Globally, the IMF forecasts a growth rate of 3.1% in 2026 and 3.4% in 2027, with emerging and developing Asia expected to grow at 5.1%.
China’s growth rate is projected to decline from 5% in 2025 to 4.5% in 2026 and further to 4% in 2027. Meanwhile, the U.S. economy is expected to grow at a rate of 2.3% in both 2026 and 2027.
However, the IMF has warned that prolonged conflicts in the Middle East could keep energy and food prices high, exerting pressure on global inflation, fiscal balance, and economic growth.
Despite these challenges, the IMF believes that India will remain a key driver of global growth in the coming years, thanks to its strong domestic demand, service sector, reforms, and demographic advantages.
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