Highlights:
- IMF raises India's FY27 growth forecast to 7 per cent from 6.4 per cent.
- India's projected growth for 2027–28 rises to 7 per cent from 6.7 per cent.
- Resilient domestic demand and strong services activity support growth.
- Favorable demographics and structural reforms strengthen India's medium-term outlook.
- IMF says new trade agreements could reduce barriers and strengthen supply chains.
The International Monetary Fund (IMF) has raised India's growth forecast for fiscal year 2026-27 to 7 per cent, up from 6.4 per cent projected in July, citing resilient domestic demand and robust services activity. The revised estimate places India among the fastest-growing major economies.
“India remains among the fastest-growing major economies, with growth in 2026 projected at 7.0 per cent,” the IMF said in the World Economic Outlook (WEO) report released during its annual meeting in Bangkok.
“This reflects stronger-than-expected momentum, supported by resilient domestic demand and robust services activity,” the report said.
The IMF also raised its growth projection for India in fiscal year 2027-28 to 7 per cent, up from its July estimate of 6.7 per cent.
India's economic growth has remained strong, supported by domestic demand and the services sector, despite higher oil prices, the report said.
IMF sees stronger medium-term growth potential
The IMF said India stood out among economies receiving upward revisions to their medium-term growth outlooks. The assessment reflects sustained economic momentum and growing evidence of stronger growth potential.
The report attributed this outlook to favorable demographic trends, a large and expanding domestic market, and continued structural reforms.
By comparison, global output is projected to grow at an average annual rate of 3.2 per cent between 2028 and 2031. The IMF described this as a persistently weak performance compared with the historical average of 3.7 per cent recorded between 2000 and 2019.
The report also said the medium-term global outlook had become increasingly uneven since January 2026. Downgrades were concentrated among economies directly affected by the conflict in the Middle East and energy-importing emerging market and developing economies elsewhere, excluding India.
Trade agreements could strengthen supply chains
The WEO report also highlighted the potential benefits of new trade agreements in reducing trade barriers and improving supply-chain resilience.
On trade, the WEO said new agreements "such as the EU's recent trade agreements with India and MERCOSUR (South American regional economic and political integration bloc)... or the United Kingdom's agreement with India" could lower tariff and non-tariff barriers, help economies adjust to recent trade policy changes and strengthen supply-chain resilience.
The IMF's revised projections point to continued strength in India's economic outlook, with domestic demand, services activity, demographics and structural reforms among the factors supporting its growth prospects.
