Post by : Badri Ariffin

India is set to remain one of the fastest-growing major economies in the world, with the International Monetary Fund (IMF) forecasting a 6.6 percent GDP growth in 2025–26, according to its latest World Economic Outlook report. The projection marks an upward revision from earlier estimates, highlighting India’s economic resilience amid global headwinds.

The IMF said India’s strong performance in the first quarter has helped offset the impact of higher US tariffs on Indian exports, allowing the economy to maintain its momentum despite global trade disruptions. The growth forecast positions India ahead of China’s expected 4.8 percent expansion, underlining its steady domestic demand and revival in manufacturing and services.

India’s economy grew 6.5 percent in FY25, staying within the government’s target range of 6.3–6.8 percent for FY26. The Fund noted that the current boost is largely driven by the carryover effect of a strong start to FY26, though growth may moderate slightly to 6.2 percent in 2026 as early momentum eases.

Globally, the IMF expects world output to grow 3.2 percent in 2025 and 3.1 percent in 2026, slower than 2024’s 3.3 percent. Advanced economies are projected to expand just 1.6 percent, while emerging markets are seen averaging 4.2 percent. Among advanced nations, Spain (2.9 percent) and the United States (1.9 percent) lead the pack, while Japan (1.1 percent) and Canada (1.2 percent) lag behind.

Despite global trade tensions, the IMF said the tariff shock proved smaller than feared, crediting India’s robust private investment, resilient consumption, and trade diversification for cushioning the impact. Inflation is easing worldwide but remains uneven, with some economies still facing price pressures and policy uncertainty.

As global growth cools, the IMF urged nations to rebuild fiscal buffers and maintain policy discipline, emphasizing the importance of transparency and long-term structural reforms to preserve economic stability.

India’s outlook, however, stands out as a bright spot — powered by domestic confidence, manufacturing gains, and a thriving service sector — keeping it firmly on track to lead global growth through the mid-2020s.

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