The International Monetary Fund (IMF) has slightly increased India’s GDP growth forecast for the financial year 2027 to 6.5 percent. This is 0.1 percentage point more than the January estimate. Additionally, the IMF has warned that rising geopolitical tensions – particularly the ongoing war in the Middle East – will weigh on global growth and lead to higher inflation in the short term. In its latest ‘World Economic Outlook/Global Financial Stability Report’ update, titled ‘Global Financial Markets Confront the War in the Middle East and Amplification Risks’, the IMF said growth is expected to remain stable at 6.5 per cent in FY2028.
IMF Growth Forecast 2026: 🇺🇸 US: 2.3% 🇩🇪 Germany: 0.8% 🇫🇷 France: 0.9% 🇮🇹 Italy: 0.5% 🇪🇸 Spain: 2.1% 🇬🇧 UK: 0.8% 🇯🇵 Japan: 0.7% 🇨🇦 Canada: 1.5% 🇨🇳 China: 4.4% 🇮🇳 India: 6.5% 🇷🇺 Russia: 1.1% 🇧🇷 Brazil: 1.9% 🇲🇽 Mexico: 1.6% 🇸🇦 Saudi Arabia: 3.1% 🇳🇬 Nigeria: 4.1% 🇿🇦 pic.twitter.com/hs7T3ebF1v
— IMF (@IMFNews) April 14, 2026
Why did the estimate increase?
IMF has attributed India’s strength to the strong momentum achieved since 2025, reduction in external tariff pressure and strength of domestic demand. This comes as the global impact of the conflict is weighing heavily on emerging markets. For 2026, the growth forecast has been raised slightly by 0.3 percentage points (0.1 percentage points from January) to 6.5 per cent, the IMF said. The main reasons for this are the momentum gained from the strong results of 2025 and the reduction in additional US tariffs on Indian goods from 50 percent to 10 percent. Both these factors are reducing the ill effects of the Middle East conflict. Even in 2027, growth is expected to remain at 6.5 percent. For India, IMF data and projections are presented on a fiscal year basis. It further said that in India, the growth forecast for 2025 has been increased by 1.0 percentage points to 7.6 percent as compared to October.
Global growth expected to decline and inflation to rise.
On the other hand, IMF said in its report that the Iran war has slowed down the world’s economic pace this year, due to which there is a possibility of a decline in the growth rate compared to 2025. The IMF has reduced its estimate of global growth to 3.1 percent for 2026, whereas in January it was expected to be 3.3 percent. This will be slower than the projected 3.4 percent growth in 2025. The US and Israeli attacks on Iran, closure of Iran’s Strait of Hormuz and retaliatory attacks on oil refineries and other energy infrastructure in neighboring countries have led to a rise in oil and gas prices around the world. As a result, the IMF has raised its forecast for global inflation this year to 4.4 percent, compared to 3.8 percent in January. Whereas for 2025 it was 4.1 percent.
