By Anjali Sharma
WASHINGTON – The International Monetary Fund on Tuesday has raised its economic growth forecast for India for the financial year 2026-27 to 7% an upward revision of 60 basis points, cited sustained domestic demand and strong activity in the services sector.
IMF released its latest World Economic Outlook, also upgraded its projection for India’s GDP growth in FY28 by 30 basis points to 7% according to a media reports.
The revisions indicated that India’s economic momentum is expected to remain strong over the next two financial years.
The IMF attributed India’s growth prospects to favorable demographic trends, the expansion of its domestic consumer market and continued structural reforms.
These factors are expected to support economic activity and keep India among the fastest-growing major economies.
The latest projections follow similar revisions by other institutions.
The Reserve Bank of India and the World Bank raised their forecasts for India’s economic growth in FY27 to 7.1% reflected a more optimistic outlook for the country’s near-term economic performance.
The IMF expects India’s consumer price index inflation to average 5 per cent in FY27 before moderating to 4.4 per cent in FY28 on the inflation front.
The projection for the current financial year is lower than the RBI’s latest inflation estimate of 5.2 per cent.
India’s current account deficit is projected to widen to 1.5 per cent of GDP in FY27, compared with 0.7 per cent in FY26.
The deficit is expected to narrow to 1.3 per cent of GDP in FY28.
The projected widening of the current account deficit suggests that the gap between the country’s external receipts and payments could increase in the near term before narrowing in the following financial year.
On the global level, the IMF raised its economic growth forecast for 2026 by 10 basis points to 3.1% while keeping its projection for 2027 unchanged at 3.4%.
The report showed that advanced economies are expected to grow by 2.1% in 2026, compared with an estimated 2% in 2025.
The outlook for emerging market and developing economies is less uniform, with growth projected to slow to 3.7 per cent in 2026 from 4.5 per cent in the previous year before recovering to 4.4 per cent in 2027.
The Fund noted that geopolitical developments and technological advances are influencing the direction of the global economy.
It cautioned that the longer-term implications of these changes remain uncertain.
