All the big agencies of the world are seen gambling on India’s growth. Image Credit source: ChatGPT
About two weeks ago, the Government of India had presented India’s second quarter growth figures. India’s second quarter growth was 7.4 percent. Now about 10 days before the budget, two big gifts have been received from America. This gift has been given by the International Monetary Fund and America’s big financial firms and rating agencies. Both of them have surprised the world by presenting a new picture of the new India.
India is the only country among all the big countries in the world whose growth rate has been kept above 7 percent. It means clearly that India is now rapidly becoming the engine of growth of the world. The reason behind this is the increasing consumption and demand in the country. Also, the country is performing much better in many sectors. That too at a time when inflation in India is below 2 percent. But the policy rate in India still remains above 5 percent.
On the other hand, Moody’s has also presented its outlook. In which it is clearly stated that India’s growth rate is likely to be above 7 percent. The special thing is that the estimates issued by IMF and Moody’s for the current financial year are completely the same.
Earlier, in the December policy meeting, India’s growth was estimated by RBI. That is also the same as currently imposed by Moody’s and IMF. Let us also tell you what kind of estimates have been made by IMF and Moody’s.
India ahead in IMF report
The International Monetary Fund, while changing its forecasts in its Global Economic Outlook released on January 19, said that the growth rate of India’s economy in the current and upcoming financial years will be higher than before. The IMF estimates that India’s GDP will grow by 7.3 percent in fiscal year 2026, which is 0.7 percentage points higher than the October estimate.
The growth rate for the financial year 2027 has also been increased to 6.4 percent from the earlier estimate of 6.2 percent. The IMF estimates that growth will stabilize at around 6.4 percent in fiscal year 2028 as temporary and cyclical economic supports end.
In India, the growth forecast for 2025 has been raised by 0.7 percentage points to 7.3 per cent, reflecting better-than-expected performance in the third quarter of the year and strong momentum in the fourth quarter, the IMF said. The IMF further said that the growth rate is expected to decline in the coming years due to favorable base effect and reduced stimulus from short-term factors.
Update IMF Growth Forecasts for 2026: 4.4%
Explore the full projections. https://t.co/RDO0Y3o9nG pic.twitter.com/B88JGr1k9X
— IMF (@IMFNews) January 19, 2026
America’s growth forecast also increased
IMF has also become more optimistic about the global economy. It has raised its global growth forecast for 2026 to 3.3 percent from 3.1 percent estimated in October, which is equal to the pace recorded in 2025. The IMF said that on the surface this stable performance is the result of the balance of various opposing forces. The challenges posed by changes in trade policy are being balanced by growing investment in tech, particularly artificial intelligence, which is higher in North America and Asia than in other regions.
Among the world’s major economies, the IMF now estimates US growth at 2.4 percent in 2025, up from 2.1 percent previously. China’s growth rate is projected to decline from 5 percent to 4.5 percent, and the IMF has raised its forecast for 2026 by 0.3 percentage points from earlier projections.
India’s growth in Moody’s report
Rating agency Moody’s has estimated India’s economic growth rate to be 7.3 percent in the current financial year, due to which strong economic expansion will support average household income and strengthen insurance demand. In its report released on India’s insurance sector, Moody’s said that the industry is likely to benefit from continued increase in premiums.
Which will be driven by strong economic expansion, increasing digitalization, tax changes and proposed reforms in the key government-owned insurance sector. This is expected to improve the currently weak profitability of the industry. Moody’s said that we expect India’s economy to grow at a rate of 7.3 percent in the financial year 2025-26, which is more than 6.5 percent in the last financial year.
This will increase the average income and support the demand for insurance. In the financial year 2024-25, per capita GDP (gross domestic product) increased by 8.2 percent on an annual basis to US $ 11,176, while the overall GDP growth was recorded at 6.5 percent.
Insurance sector is doing wonders
According to Moody’s, total insurance premium income increased by 17 per cent to Rs 10.9 lakh crore in the first eight months (April-November) of financial year 2025-26 due to India’s strong economic growth. During this period, an increase of 14 percent was recorded in health insurance premium and 20 percent increase in new business premium of life insurance. This growth was faster than in the financial year 2024-25 when the total premium increased by seven percent to Rs 11.9 lakh crore. The rating agency said the increase in premium income also reflects the increasing risk awareness among Indian consumers and the ongoing digitalization of the country’s economy. Digitization eases the distribution and sale of insurance products, making them more accessible. This is in line with the insurance regulator’s goal of insurance for all by 2047.
will benefit from these
Moody’s said the government aims to improve the profitability of the country’s public sector insurance companies, which have a major impact on the market. The government has sold minority stake in Life Insurance Corporation of India (LIC) and proposed to provide capital to some government companies provided they improve their underwriting capacity. Other proposed measures also include the possibility of merger or privatization of government insurance companies. The rating agency said that increasing the foreign direct investment (FDI) limit in Indian insurance companies from 74 percent to 100 percent will provide additional financial strength to them.
World Bank also showed confidence
India’s economy performed better than expected in the first half of the year, registering a growth of more than 8 percent. In its first advance estimates released on January 6, the government projected growth at 7.4 percent for fiscal year 2026, broadly in line with the IMF’s revised outlook. The improvement in the IMF’s assessment of the economy follows a similar revaluation by the World Bank. The Washington-based lender recently raised its FY2026 growth forecast for India to 7.2 per cent and projected growth thereafter to around 6.5 per cent, driven by strong domestic demand and stability in consumption.
What do RBI estimates say?
In the month of December, the Reserve Bank of India had released estimates regarding India’s growth after the policy meeting. In which India’s growth estimate was increased. According to RBI estimates, the country’s growth may be 7.3 percent in the financial year 2026. Whereas before that RBI had kept the estimate for the current financial year at 6.8 percent. If we talk about quarter-wise figures, then RBI’s estimate for the third quarter is 7 percent and the estimate for the fourth quarter is 6.5 percent. On the other hand, India’s growth forecast in the financial year 2027 has been estimated at 6.7 percent for the first quarter and 6.8 percent for the second quarter.