The IMF has delivered upbeat news for India’s economy, lifting its 2025 growth forecast to 7.3 percent—a 0.7 percentage point increase over previous figures. Attributing the hike to exceptional results from mid-year onward, the report praises third-quarter successes and fourth-quarter acceleration.
India’s status as a global growth leader is reaffirmed in the World Economic Outlook update, distinguishing it from peers. Looking ahead, growth is expected to moderate to 6.4 percent in 2026 and 2027, reflecting a maturing economic cycle.
As emerging and developing economies average slightly above 4 percent, India stands out as their primary driver, particularly via technology and trade inflows in Asia. This dynamic persists despite uneven global recovery patterns.
India’s inflation trajectory improves markedly, with rates nearing targets post-2025 decline, aided by tame food costs that sustain consumption. The global economy anticipates 3.3 percent expansion in 2026, driven by reduced trade barriers, easing monetary conditions, and AI-fueled capital flows.
Downside risks include subdued AI productivity gains, potentially slashing investments and straining finances worldwide, with spillovers to emerging markets. Upside scenarios hinge on accelerated AI uptake enhancing efficiency, contingent on risk mitigation.
This forecast reinforces India’s economic dominance, offering stability and opportunity in an era of technological transformation and geopolitical flux.