Washington, April 14: The Chief Economist of the International Monetary Fund (IMF), Pierre-Olivier Gourinchas, stated on Tuesday that despite rising global uncertainty due to ongoing conflicts in the Middle East, India’s economic growth remains robust.
In a conversation with journalists from India, Japan, UAE, the Netherlands, and Chile, Gourinchas highlighted that India performed exceptionally well in 2025. He projected that India’s growth rate is expected to be around 7.6% on a fiscal year basis.
He also mentioned that this momentum is likely to continue into the next year. The IMF has revised its growth forecast for India in 2026 to 6.5%, slightly better than previous estimates.
This improvement comes at a time when escalating conflicts in the Middle East are driving up global oil prices, raising concerns for oil-dependent economies like India. Gourinchas acknowledged that while the war in the Middle East is impactful, the strong growth in 2025 is compensating for it.
Additionally, he noted a reduction in trade tensions between India and the United States, which is a positive sign. According to him, trade discussions between India and the U.S. have reduced tariff uncertainties and lowered taxes.
However, the IMF warns that inflation in India may rise in the coming period. Gourinchas indicated that inflation could reach 4.7% in 2026, driven by increasing global energy prices and rising food costs.
He further pointed out that food prices in India have been on the rise since the beginning of 2026. While the near future appears stable, he cautioned that India’s reliance on energy, particularly oil, could become a vulnerability.
Gourinchas explained that India is heavily dependent on energy and oil, which could pose challenges ahead. He also mentioned that India’s current growth is around its long-term potential level, estimated at approximately 6.5%.
The IMF’s assessment indicates that India is currently one of the fastest-growing major economies globally, especially as growth slows in many other countries. The escalating conflicts in West Asia have further complicated global conditions, leading to increased prices for oil and other commodities.
According to the IMF, the impact of this crisis will depend on its duration and severity. Amid these challenges, India has maintained its economic strength due to strong domestic demand, investment, and stable policies, with the private sector playing a crucial role.
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