India’s Economy to Grow 7.3% in FY26: IMF

The International Monetary Fund has lifted its India growth forecast, despite global trade worries and weak sentiment. India’s economy is now expected to expand by 7.3 per cent in fiscal year 2026, an upgrade of 0.7 percentage points, keeping India well ahead of both global and advanced economy growth averages.

The IMF also projects that India’s output will rise by 7.3 per cent in 2025 and then ease to 6.4 per cent in 2026 and 2027. These updated numbers suggest a steady cooling after a strong stretch, but the pace still stays stronger than most large economies.

IMF India growth forecast and world economy outlook

"In India, growth is revised upward by 0.7 percentage points to 7.3 per cent for 2025, reflecting the better-than expected outturn in the third quarter of the year and strong momentum in the fourth quarter. Growth is projected to moderate to 6.4 per cent in 2026 and 2027 as cyclical and temporary factors wane," the IMF said.

While India’s projections rise, the broader world economy remains stuck near 3 per cent growth. According to the IMF, global output is expected to increase by 3.3 per cent in both 2025 and 2026, before slipping slightly to 3.2 per cent in 2027, underlining a slow international backdrop.

IMF India growth forecast versus major economies

The IMF India growth forecast highlights how far India stays ahead of peers in 2026. The United States is expected to grow by 2.4 per cent, China by 4.5 per cent, and the Euro Area by 1.3 per cent in that year, leaving India at the top among large economies.

On a calendar-year basis, the IMF sees India’s economy expanding by 6.3 per cent in 2026 and 6.5 per cent in 2027. These figures differ from the fiscal-year projections but still point to a firm trend, with India keeping a clear lead over most advanced and emerging markets.

The stronger IMF India growth forecast is linked to solid domestic demand, ongoing government-led capital spending, and a slow pickup in private investment. As temporary supports fade, the IMF expects India’s pace to ease, yet the projections still place the country among the fastest-growing major economies through 2027.