The International Monetary Fund (IMF) has upgraded its economic growth forecast for India to 6.6% for the year 2025, an increase of 0.2 percentage points. This positive revision, outlined in the latest Global Economic Outlook, attributes India’s stronger-than-expected performance in the first quarter of 2025 as a key factor in overcoming the adverse effects of increased US tariffs on Indian imports. The report signifies a confident outlook for the Indian economy.
Looking ahead to 2026, the IMF anticipates a growth rate of 6.2%, a marginal downward revision of 0.2 percentage points from its previous forecast. This adjustment does not diminish the overall positive sentiment, especially considering India’s impressive 7.8% growth in the April-July quarter, which surpassed all projections. The dynamism of the Indian economy has not gone unnoticed, with IMF Managing Director Kristalina Georgieva specifically highlighting the nation’s policy reforms and its pioneering digital identity program as examples of its bold and successful governance.
This upgraded forecast from the IMF aligns with a similar positive outlook from the World Bank. The IMF also anticipates global economic growth to remain steady at 3.2% this year. While acknowledging the presence of ‘tariff shocks,’ the IMF’s Chief Economist noted that the actual impact has been somewhat contained due to trade flexibility and corporate adaptability in rerouting supply chains. However, the potential for these tariffs to hinder global economic recovery, including in the US, remains a concern.