IMF revises India's FY26 growth forecast up to 6.6%

New Delhi [India], October 14 : The International Monetary Fund (IMF) on Tuesday revised India's growth forecast for the fiscal year 2025-26 (FY26) upward to 6.6%, a 0.2 percentage point increase from its previous estimate of 6.4%.

This revision is largely due to India's strong growth momentum in the first quarter of FY26, which saw the economy grow at a rate of 7.8%

The upward revision is attributed mainly to the carryover effect from a strong first quarter, rather than any offsetting of recent US tariffs.

However, the IMF has lowered its growth forecast for the next fiscal year (FY27) by 0.2 percentage points to 6.2%, citing the impact of increased tariffs. The IMF has also downgraded its global growth forecast, expecting global growth to slow from 3.3% in 2024 to 3.2% in 2025 and 3.1% in 2026.

"In India, growth is projected to be 6.6 per cent in 2025 and 6.2 per cent in 2026. Compared with the July WEO Update, this is an upward revision for 2025, with carryover from a strong first quarter more than offsetting the increase in the US effective tariff rate on imports from India since July, and a downward revision for 2026. Compared with the pre-tariff forecast in October 2024, growth is projected to be cumulatively 0.2 percentage point lower," the IMF's October edition of World Economic Outlook added.

The World Bank has also raised its India growth forecast for FY26 to 6.5% from 6.3%, while trimming its projection for the next fiscal year by 20 basis points to 6.3%. The IMF's forecast is higher than S&P's estimate of 6.5% but lower than Fitch's estimate of 6.9%.

In 2024-25, the Indian economy grew by 6.5% in real terms. The government has maintained the GDP forecast at 6.3-6.8 per cent for 2025-26, even as US tariff uncertainty looms, affirming confidence in the country's robust domestic consumption.

IMF Managing Director Kristalina Georgieva stated that India is becoming a key engine of global growth, speaking ahead of the 2025 IMF-World Bank Annual Meetings.

In September, Global rating agency Fitch revised India's growth outlook for the fiscal year ending March 2026 to 6.9 per cent from its earlier projection of 6.5 per cent in June Global Economic Outlook (GEO).

Another major credit rating agency, Crisil, has maintained India's GDP growth forecast for the current fiscal year, 2025-26, at 6.5 per cent, even as it sees downside risks emanating from US tariffs.

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