IMF lowers India 2026‑27 growth forecast to 6.4%

New Delhi: The International Monetary Fund (IMF) on Wednesday trimmed its growth forecast for India to 6.4% for fiscal year 2027, slightly down from the 6.5% projection in April. For fiscal 2028, the IMF raised its outlook to 6.7%, up from 6.5% earlier.

“India remains among the fastest‑growing major economies, with growth supported by robust private consumption and services,” the IMF said in its World Economic Outlook update. Deniz Igan, Division Chief (World Economic Studies), told reporters that recent data and high‑frequency indicators show resilience in activity, which supported the upward revision for 2028.

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However, the IMF said higher global energy prices and their pass‑through to domestic fuel costs have weighed on the near‑term forecast for 2026–27. The fund expects the energy shock to ease in 2027, allowing the economy to strengthen and medium‑term growth to settle around 6.5%.

On the global front, the IMF projects world growth at 3% in 2026 and 3.4% in 2027 — below the 3.5% average seen in 2024–25. The fund noted that the war in the Middle East has dragged on growth, partly offset by demand from an accelerating technology cycle driven by AI adoption. The effects differ across countries depending on their exposure to the conflict and role in the technology value chain: energy exporters (outside the conflict zone) benefit from improved terms of trade, while economies integrated into the tech upturn see stronger activity even if they are energy importers.

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