**IMF Raises India’s Growth Forecast for FY26 to 6.6%**
*By Dwaipayan Roy | October 14, 2025, 07:59 PM*
The International Monetary Fund (IMF) has revised upward its growth forecast for India’s economy in the fiscal year 2025-26 (FY26). According to the latest World Economic Outlook report released today, India’s GDP is now expected to expand by 6.6%, up from the earlier projection of 6.4% made in July.
**Strong Economic Momentum Boosts Growth Outlook**
This upgraded forecast is largely driven by India’s robust performance in the first quarter of FY26, during which the economy grew at an impressive rate of 7.8%—its fastest pace in more than a year. Reflecting on this, the IMF stated, “In India, growth is projected to be 6.6% in 2025 and 6.2% in 2026,” underscoring the country’s resilience amid ongoing global economic challenges and trade tensions.
**Global Growth Outlook Downgraded**
While India’s economic prospects brighten, the IMF has slightly downgraded its global growth forecast. The fund now expects the world economy to grow by 3.2% in 2025, down from the 3.4% estimate released in July and a decrease from 3.3% projected for 2024. Furthermore, the IMF projects an average annual global growth of 3.2% between 2027 and 2030, which remains below the pre-pandemic historical average of 3.7% recorded between 2000 and 2019.
**Impact of Tariffs on Global Growth**
Pierre-Olivier Gourinchas, the IMF’s Chief Economist, commented on the role of tariffs in influencing global growth. He noted, “The increase in tariffs and its effect has been smaller than expected so far.” However, he also cautioned against drawing premature conclusions about the repercussions of tariff increases, emphasizing that their full impact on the global economy may yet unfold.
**Downside Risks to Growth Remain**
The IMF’s report highlights several downside risks that could dampen global economic growth moving forward. These include prolonged trade uncertainties, labor supply shocks, fiscal vulnerabilities, financial market fragilities, and abrupt adjustments related to emerging technologies. The report further points out that medium-term growth prospects are weakening for roughly two-thirds of the world economy.
Emerging market and middle-income countries are experiencing the most significant slowdowns, while the poorest nations grappling with protracted conflicts face heightened risks of losing vital growth momentum.
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India’s stronger-than-expected growth trajectory offers a beacon of optimism amid a cautiously challenging global economic environment, signaling resilience that could have important implications for regional and global economic dynamics in the years ahead.
https://www.newsbytesapp.com/news/business/this-is-what-imf-had-to-say-about-india-s-economy/story
