The International Monetary Fund (IMF), in its July 2025 World Economic Outlook update, revised India’s GDP growth forecast to 6.4% for both FY2025–26 and FY2026–27, citing a more favourable global environment.

Key Estimates by IMF (July 2025 WEO Update)

India’s Growth Forecast

• India’s economic growth for FY 2025–26 is projected at 6.4%, which is an increase of 0.2 percentage points compared to the April 2025 estimate.
• For FY 2026–27, India’s growth is also projected at 6.4%, revised upward by 0.1 percentage points from the previous forecast.

Global Growth Forecast

• The IMF projects global GDP growth at 3.0% in 2025, which is 0.2 percentage points higher than the April 2025 estimate.
• For 2026, global growth is projected at 3.1%, showing an upward revision of 0.1 percentage points.

• Despite the revision, global growth remains below the 3.3% recorded in 2024 and the pre-COVID-19 historical average of 3.7%.

Factors Favouring Indian Economy 

• Benign External Environment: India’s growth prospects improved due to a more favourable global trade and economic climate than previously expected.
• Front-Loaded Trade Adjustments: Stronger-than-expected export activity driven by early responses to anticipated tariff changes.
• Lower U.S. Tariffs & Weak Dollar: Lower-than-anticipated U.S. tariff rates and a weaker U.S. dollar improved India’s external trade outlook.
• Improved Financial Conditions: Global fiscal expansion and eased financial conditions have indirectly boosted investor sentiment and demand in emerging economies like India.

India’s upgraded forecast reflects resilient domestic fundamentals and a strategic advantage in responding to global trade and financial shifts, positioning the country strongly amid a cautiously recovering global economy.

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