India’s economy grew 7.8 per cent in fiscal year 2025-26. The IMF said the higher forecast ‘reflects stronger-than-expected momentum, supported by resilient domestic demand and robust services activity’
IMF raises India’s growth forecast to 7% for FY26-27: The International Monetary Fund on Tuesday raised India’s Gross Domestic Product(GDP) growth forecast from 6.4% to 7.0% for the financial year 2026-27. The move has come amid Middle East conflict and fresh inflationary pressures.
In its October 2026 World Economic Outlook(WEO), the IMF projected India’s growth at 7.0 per cent in 2026 and 2027, on a fiscal year basis. The 2026 projection is 0.6 percentage points higher than in the July 2026 WEO Update and 0.5 percentage points higher than in the April 2026 forecast. The 2027 projection was raised by 0.3 percentage point from July and by 0.5 percentage point from April.
The IMF noted that the medium-term global economic outlook had become increasingly uneven, with downward revisions concentrated in economies directly affected by the Middle East conflict and energy-importing emerging and developing economies, excluding India.
India’s economy grew 7.8 per cent in fiscal year 2025-26. The IMF said the higher forecast ‘reflects stronger-than-expected momentum, supported by resilient domestic demand and robust services activity’. On inflation, the IMF projected India’s consumer prices to rise by 5 per cent.
The IMF’s oil-price assumption for 2026 has risen to $95.74 a barrel, around 41% higher than the 2025 average, highlighting the scale of the energy-price shock built into its latest outlook. The fund expects the average to ease to $87.39 a barrel in 2027. These are assumptions underpinning its projections, not guarantees of where prices will trade.
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The IMF’s outlook reflects cautious optimism, recognising India’s strong growth momentum while acknowledging the persistent global uncertainties. The 7% growth projection signals the IMF’s confidence in India’s economic strength, while recognising that global uncertainties could pose challenges in the months ahead.
