United Nations, July 29 — The International Monetary Fund (IMF) has raised India’s economic growth forecast for the current and next fiscal years, reaffirming its position as the world’s fastest-growing major economy. Citing a strong reform momentum, robust consumption, and increased public investment, the IMF now projects India’s GDP growth at 6.4% for the ongoing fiscal year.
The revised estimate, announced in the latest World Economic Outlook (WEO) update, marks a 0.2% increase over its April forecast. The projection for the next fiscal year has also been raised by 0.1%. If measured on a calendar year basis, India’s growth is forecast at 6.7% this year and 6.4% next year.
Deniz Igan, Division Chief in the IMF’s Research Department, highlighted several drivers behind the upgrade, including reduced inflation expectations — now pegged at 3.7% this year and 4% in 2026 — and the suspension of previously threatened high US tariffs. Lower food prices and a relatively benign global economic environment have also contributed to the positive outlook.
Globally, the IMF increased its growth forecast for the current calendar year to 3.2%, up 0.3% from April, and maintained the same rate for 2026. However, the report warned of risks tied to rising tariffs and geopolitical tensions that could derail global recovery.
China’s growth projection was raised to 4.8% for this year but is expected to decline to 4.2% next year. The US economy is projected to grow by 1.9% this year and 2% in 2026.
For India to sustain its growth momentum, the IMF emphasized the need to foster job creation, improve labour market flexibility, invest in infrastructure and education, reduce trade barriers, and streamline bureaucratic processes to improve business productivity.
