India will remain fastest-growing major economy in 2026 and 2027, predicts IMF

THe International pecuniary monetary fund (IMF) on tues, marginally increased bharat’s growing projections for 2026 and 2027, to 6.5% in both years, even as it downgraded its global growth projection to 3.1% in 2026, down from the 3.3% it predicted in January.IMF’s latest World Economic Outlook (WEO) report comes against the background of the war in West Asia, which has roiled global markets and supply chains. The US and Iran are currently in the middle of an uncertain ceasefire, but the first round of talks after the ceasefire was announced, which were held last weekend, did not result in a peace deal.India too has been affected by the war, with supplies of gas especially, being hit, but IMF’s update reiterates that the country will remain the fastest-growing major economy in the world in both 2026 and 2027. IMF’s update, however, clarified that the current global environment is hostile from the growth perspective.ALSO READ | ‘Think of the unthinkable and prepare for it’, IMF warns on Iran war impact on global economyThe April 2026 edition of the report, titled “Global Economy in the Shadow of War”, also revised IMF’s estimate of India’s growth in 2025 to 7.6%, a full percentage point higher than what it projected in October last year. This is in keeping with India’s official GDP growth rate of 7.6% in 2025-26. IMF’s calendar year projections/ estimates represent India’s fiscal years in way so that 2025 in IMF data captures 2025-26 for India’s fiscal year. Meanwhile, India’s growth in both the 2026 and 2027 fiscal years is expected to be 6.5%, which will still leave the country well ahead of other major economies. IMF’s 2026 growth forecast for India is slightly lower than RBI’s growth forecast of 6.9% for 2026-27.“In India, growth for 2025 is revised upward by 1.0 percentage point relative to October, to 7.6%, reflecting the better-than-expected outturn in the second and third quarters of the fiscal year and sustained strong momentum in the fourth quarter. For 2026, growth is revised upward moderately by 0.3 percentage point (0.1 percentage point relative to January) to 6.5%, led by positive contributions from the carry-over of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50% to 10%, which outweigh the adverse impact of the Middle East conflict. Growth is projected to stay at 6.5% in 2027,” said the report.ALSO READ | RBI projects low growth, high inflation amid West Asia conflict, in ‘wait-and-watch’ modeIndia’s inflation is expected to pick up moderately, rising to 4.7% in 2026 from 3.3% in 2025, before easing back to 4% in 2027, largely on account of higher global energy and food prices stemming from the conflict. This is largely in keeping with RBI’s projection of inflation of 4.6% in 2026-27.The broader message of the IMF report, however, is one of a world economy knocked off its course by war in West Asia. Instead of a standard baseline, IMF has used what it calls a “reference forecast” this time around that assumes the conflict remains limited in duration, intensity and scope, and that disruptions fade by mid-2026. Even under that relatively benign assumption, global growth is projected at 3.1% in 2026 and 3.2% in 2027, lower than the roughly 3.4% pace seen in 2024 and 2025. IMF warned that should the conflict prove more protracted than assumed, the damage to the global economy could be substantially larger. In a severe scenario in which there is more damage to energy infrastructure in the conflict region, global growth could fall to just about 2% in 2026.