IMF India Growth ForecastImage Credit source: AI
IMF India Growth Forecast: Very positive news has come out regarding India’s economy. The International Monetary Fund (IMF) has increased India’s economic growth rate estimate for 2025 to 7.3 percent. Better corporate earnings and strong economic growth have been cited as the main reasons for this. The IMF says that despite the global turmoil related to tariffs, the world economy is showing stability.
IMF has confidence in India’s growth
According to IMF’s World Economic Outlook report, India’s 2025 growth has been increased by 0.7 percentage points to 7.3 percent. The report said that corporate earnings in the third quarter were better than expected and strong economic growth was seen in the fourth quarter. However, IMF estimates that India’s growth may moderate to 6.4 percent in 2026 and 2027. The reason for this has been said to be the weakening of temporary and cyclical factors.
Confidence returned due to corporate profits
Last year, there was increased pressure in the market due to slowdown in corporate profits. Selling by foreign investors and instability in the stock market were also its effect. But now there are signs of improvement in corporate profits. IMF believes that this will restore investor confidence and bring stability to the market. This improvement shows the initial signs of recovery i.e. green shoots in the Indian economy.
Big role of AI in global economy
According to the IMF, the global economy has shown strength despite US tariffs and trade tensions. Global growth this year is estimated at 3.3 percent, which is 0.2 percent more than the October estimate. Increasing investment in AI has been considered a major reason for this strength. IT and AI investment in America has reached the highest level since 2001, whose positive impact is also visible on Asia’s tech exports.
Relief in inflation, but risks remain
The IMF estimates that global inflation may decline from 4.1 percent in 2025 to 3.8 percent in 2026 and 3.4 percent in 2027. In India too, inflation is expected to return closer to the target due to softening of food prices. However, the IMF has also warned that high valuations in the AI sector, the decline in the US stock market and geopolitical tensions will remain risks. These factors can put pressure on global markets, supply chains and interest rates.