The International Monetary Fund (IMF) has raised India’s gross domestic product (GDP) growth forecast for 2026-27 by 60 basis points to 7 per cent, citing resilient domestic demand and robust services activity.
In its latest World Economic Outlook, released on Tuesday, the IMF also raised its growth projection for FY28 by 30 basis points to 7 per cent, Financial Express reported. The upgrade reflects stronger-than-expected economic momentum, supported by domestic demand and services, the Fund said.
The IMF attributed India’s growth potential to favourable demographic dynamics, a large and expanding domestic market, and continued structural reforms. India remains among the fastest-growing major economies, it said.
The IMF expects India’s consumer price index (CPI) inflation to average 5 per cent in FY27 before easing to 4.4 per cent in FY28. The forecast is below the RBI’s latest projection of 5.2 per cent for the current financial year.
The Fund also expects India’s current account deficit to widen to 1.5 per cent of GDP in FY27, from 0.7 per cent in FY26, before narrowing to 1.3 per cent in FY28.
Globally, the IMF raised its 2026 growth forecast by 10 basis points to 3.1 per cent, while retaining its 2027 projection at 3.4 per cent. Growth in advanced economies is projected at 2.1 per cent in 2026, compared with 2 per cent in 2025.
The Fund said geopolitical developments and technological advances were reshaping the global economy, although their longer-term effects remained uncertain. Growth in emerging market and developing economies is projected to slow to 3.7 per cent in 2026 from 4.5 per cent in 2025, before recovering to 4.4 per cent in 2027.
