IMF Projects India’s FY26 Growth at 6.6%
The International Monetary Fund (IMF), in its October 2025 edition of the World Economic Outlook (WEO), has revised India’s GDP growth projection for FY26 upward to 6.6%, from its earlier estimate of 6.4%, reflecting a 20 basis point upward revision. This improved outlook is primarily attributed to India’s strong first-quarter performance, where the economy expanded by 7.8% during April–June 2025. The IMF’s projection broadly aligns with the World Bank’s forecast of 6.5%, indicating institutional consensus on India’s growth momentum. However, growth is expected to moderate to 6.2% in FY27 due to global uncertainties.
Key drivers of India’s improved growth outlook include GST reforms, particularly tax rate reductions that stimulated consumption by making goods and services more affordable. Despite the reintroduction of U.S. tariffs on Indian exports in July 2025, India demonstrated notable economic resilience, supported by strong domestic demand. Low inflation, with CPI at 2.8%, helped preserve purchasing power and sustain consumption. Sectorally, the services sector remains the primary growth engine, supported by IT, finance, and telecom, while manufacturing, construction, a
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