IMF slashes India’s growth rate forecast to 6.2 % for FY 26
Report
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The International Monetary Fund (IMF) has slashed the economic growth rate forecast for the Indian economy in the fiscal year 2025-26 to 6.2%, citing increased trade tensions and global uncertainty.
The IMF has also reduced its growth projection for the Indian economy to 6.3% in 2026-27.
Despite the reduction in the Indian economy's growth rate , India will remain the fastest-growing major economy in the world.
According to the IMF, the world economy is expected to grow by 2.8 in 2025. In its January forecast, it had forecasted a growth rate of 3.3%.
It will be the lowest growth rate in the world economy since the COVID-19 pandemic.
The IMF expects the world economy to grow by 3.3 % in 2024.
These projections for the world economy and India were made by the IMF in its latest edition of the World Economic Outlook Report, released on April 22, 2025.
IMF expect India to have a stable economic growth rate
According to the IMF, the Indian economy is expected to remain stable despite global uncertainty induced by American President Donald Trump’s threat of reciprocal tariffs on its trading partners.
- It expects India to grow by 6.2 % in 2025-26.
- The Indian growth rate will be sustained by an increase in private consumption, particularly in rural areas.
- According to the IMF, the retail inflation in 2025-26 is expected to be 4.2 % and 4.1% in 2026-27.
- The current account deficit of India is expected to be 0.9% of the gross domestic product (GDP) in 2025-26 and 4.1% in 2026-27.
- The unemployment rate in India is expected to be 4.9%.
IMF on World Economy
According to the IMF, the threat of reciprocal tariffs by the United States is unprecedented in a century and has created a highly unpredictable global economic environment.
- The world economy is expected to grow by 2.8% in 2025 and 3% in 2026.
- The United States Economy is expected to grow by 1.8% in 2025, a reduction of 0.9 percentage points compared to the January forecast, and by 1.7% in 2026, a decrease of 0.4 percentage points.
- The IMF has cut China’s growth rate by 60 basis points (bps) or 0.6% to 4 % in 2025 and by 50 bps to 4% in 2026.
About the World Economic Outlook
- The biannual World Economic Outlook is an IMF flagship publication in which the IMF analyses and projects the growth rate of the world economy in the near and medium term.
- The IMF also releases periodic updates on the world economy.
About the International Monetary Fund (IMF)
The International Monetary Fund is a global multilateral development institution established in 1944.
The IMF is the lender of last resort to the member countries facing a balance of payment or economic crisis.
Member countries -191
Headquarters: Washington, D.C, USA
Managing Director: Kristalina Georgieva
Reports issued by the IMF
- World Economic Outlook
- Global Financial Stability Report
- Fiscal Monitor
