CHENNAI: The International Monetary Fund (IMF) has projected that India’s economy will grow at 6.6 percent in 2025–26, maintaining its position as the world’s fastest-growing major economy and outpacing China’s expected growth of around 4.8 percent. The forecast, published in the IMF’s latest World Economic Outlook, marks an upward revision driven by stronger-than-expected performance in the first quarter of the fiscal year and continued domestic demand resilience.
According to the IMF, India’s growth momentum remains supported by robust private consumption, expanding manufacturing and services activity, and healthy public and private investment. These factors have helped offset the impact of global trade frictions and higher external tariffs introduced by advanced economies in recent months. The report notes that while several economies have shown signs of slowing, India’s broad-based growth remains comparatively stable.
The IMF’s optimism is partly based on the “carry-over effect” from India’s strong start to the year, which has lifted full-year growth estimates. Despite persistent global headwinds — including tighter financial conditions, slowing trade, and geopolitical uncertainties — India’s domestic economy has shown resilience, aided by steady tax collections, credit expansion, and policy continuity.
However, the IMF also cautioned that India’s medium-term growth may moderate as the one-off effects of the early-year boost fade. Risks to the outlook include weaker global demand, prolonged trade tensions, and potential disruptions to capital flows. The Fund highlighted the need for continued reforms, fiscal prudence, and investment in infrastructure and productivity to sustain high growth rates.
For India, the IMF forecast reinforces its status as a key growth driver in the global economy. Strong performance in 2025–26 could further enhance investor confidence and attract higher foreign capital inflows, especially as many other large economies face slower recoveries. At the same time, policymakers are expected to remain vigilant about inflationary pressures and external vulnerabilities.
In essence, the IMF’s latest projection reflects both the strength of India’s domestic fundamentals and the challenges of navigating an increasingly uncertain global environment. If the growth momentum holds, India could consolidate its lead as the fastest-growing large economy for another year, underlining its pivotal role in shaping global growth trends.