imf-predicts-india-s-growth-slowing-to-6-4-in-fy27

India’s economic growth is projected to slow sharply to 6.4 per cent in 2026–27 from an estimated 7.3 per cent in the current financial year, the International Monetary Fund (IMF) said on Monday, citing the fading of cyclical and temporary growth drivers.

 

In an update to its World Economic Outlook, the IMF said, “Growth is projected to moderate to 6.4% in 2026 and 2027 as cyclical and temporary factors wane.”

 

Despite the expected slowdown, the multilateral lender revised its 2026–27 forecast upwards by 20 basis points from its October 2025 estimate of 6.2 per cent. The IMF also raised its projection for 2025–26 growth by 70 basis points to 7.3 per cent, attributing the upgrade to a stronger-than-anticipated performance in the latter half of the year.

 

The report said the upward revision was driven by a “better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter”.

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Official data released in November showed India’s gross domestic product growth surged to 8.2 per cent during July–September 2025, exceeding expectations. Subsequently, the Reserve Bank of India upgraded its growth forecast for the current year to 7.3 per cent, while the Ministry of Statistics and Programme Implementation (MoSPI) placed its first advance estimate for 2025–26 at 7.4 per cent.

 

However, MoSPI’s estimate also suggested a moderation in growth to 6.9 per cent in the second half of the year from 8 per cent in the first half.

 

For 2027-28, the IMF retained its October forecast of 6.4 per cent growth.

 

The IMF noted that these projections do not yet reflect the impending revision of India’s GDP series, which will update the base year to 2022–23 from 2011–12 and incorporate methodological changes. The first estimates under the new series are expected on February 27, alongside the October–December GDP data and the second advance estimate for 2025–26.

 

Commenting on price trends, the IMF said inflation in India is expected to return to “near target levels”.

 

On the global outlook, the IMF raised its 2026 world growth forecast by 20 basis points to 3.3 per cent and retained the 2027 projection at 3.2 per cent, noting that trade policy uncertainties were being offset by strong investment in technology, including artificial intelligence.