IMF retains India's economic growth outlook for FY26 & FY27 at 6.5%

The International Monetary Fund (IMF) has maintained India’s growth to be solid at 6.5 percent for the next two fiscal years 2025-26 or FY26 and 2026-27 or FY27, as projected in October in an update to its World Economic Outlook released on Friday. India maintain the fastest growth rate among the world’s largest economies. Meanwhile, Global growth is projected at 3.3 percent both in 2025 and 2026 as per IMF, below the historical average of 3.7 percent. The 2025 forecast remains largely unchanged from the October 2024 World Economic Outlook, with an upward revision for the United States balancing declines in other major economies.
“Growth in India had slowed more than expected, led by a sharper-than-expected deceleration in industrial activity,” the IMF said in its update to the World Economic Outlook (WEO), referring to the surprise 5.4 per cent growth in the September quarter. The IMF’s growth forecast is lower than that of the World Bank, which on Thursday maintained its growth projection for India at 6.7 per cent for FY26 and FY27, asserting that the country would remain the fastest-growing major economy over the next two years.
“India is projected to maintain the fastest growth rate among the world’s largest economies, at 6.7 per cent in both FY26 and FY27. The services sector is expected to enjoy sustained expansion, and manufacturing activity is anticipated to strengthen, supported by government initiatives to enhance logistics infrastructure and improve the business environment through tax reforms,” the World Bank said in its flagship Global Economic Prospects report.