IMF Upgrades India's Growth Forecast to 6.6% for 2025

IMF Upgrades India's Growth Forecast to 6.6% for 2025

The International Monetary Fund (IMF) has raised India's GDP growth forecast for 2025-26 to 6.6%, up from the previous estimate of 6.4%. This adjustment comes despite the recent increase in US tariffs on Indian exports. The IMF's latest World Economic Outlook, released on Tuesday, attributes this positive outlook to India's strong economic performance in the first quarter of 2025, which has effectively countered the impact of the tariffs.

India's economy recorded a remarkable growth rate of 7.8% during the April to July quarter of 2025, surpassing expectations and solidifying its status as a significant player in global economic growth. However, the IMF has slightly lowered its growth projection for 2026 to 6.2%, indicating a potential slowdown in momentum.

IMF Managing Director Kristalina Georgieva praised India's economic trajectory, describing it as "impressive" and commending the country's successful implementation of structural reforms. She noted, "I'm very big on India because of the boldness with which they do things that others are telling them…not possible."

The IMF's report highlights that while global GDP growth is projected at 3.2% for 2025, India stands out as the fastest-growing economy among emerging markets and developing economies. This growth is supported by strong domestic demand, investment inflows, and a resilient services sector.

Despite the challenges posed by US tariffs, the IMF acknowledges that many economies, including India, have adapted through trade agreements and supply chain adjustments. The US growth forecast has been slightly increased to 2% for 2025, but concerns remain due to inflation and a weakening labour market.

Overall, the IMF's upward revision of India's growth forecast reinforces the country's role as a key driver of global economic growth amid ongoing uncertainties in the international landscape.