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The IMF raised India’s FY27 growth forecast to 6.5% but flagged risks from West Asia tensions, warning of pressure on global growth and inflation.
India’s growth outlook improves marginally, but the IMF cautions that West Asia tensions could weigh on global momentum and drive up inflation. (IMAGE: PTI)
The International Monetary Fund (IMF) on Tuesday raised India’s FY27 GDP growth forecast to 6.5%, a 0.1 percentage point increase from its January projection, while warning that escalating tensions in West Asia following US-Israeli strikes on Iran and Tehran’s retaliation could weigh on global growth and push inflation higher in the near term.
The IMF downgraded its forecast for global growth to 3.1% in 2026 from the 3.3% it had forecast back in January. The expected growth would mark a deceleration from a 3.4% expansion in 2025.
“In India, growth for 2025 is revised upward by 1.0 percentage point relative to October, to 7.6 percent, 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 percent, led by positive contributions from the carryover of the strong 2025 outturn and the decline in additional US tariffs on Indian goods from 50 to 10 percent, which outweigh the adverse impact of the Middle East conflict. Growth is projected to stay at 6.5 percent in 2027,” the report’s first chapter titled Global Prospects and Policies said.
April 14, 2026, 6:59 PM IST
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