Did the IMF Just Boost India's 2025 Growth Forecast to 7.3%?
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Synopsis
The IMF has significantly increased its growth forecast for India to 7.3% for 2025, citing a robust economic performance in the latter half of the year. This comes as a positive sign for emerging markets, even as growth is expected to moderate in the following years. Find out more about the implications of this revision.
Key Takeaways
- IMF projects India's growth at 7.3% for 2025.
- Revision based on strong economic performance.
- Growth expected to moderate to 6.4% in 2026 and 2027.
- India remains a vital player among emerging economies.
- Positive inflation trends anticipated in 2025.
Washington, Jan 19 (NationPress) The International Monetary Fund has revised its forecast for India's economic growth in 2025, increasing it by a substantial 0.7 percentage points to 7.3 percent. This adjustment comes in light of a stronger-than-anticipated performance during the latter half of the year, even as the IMF predicts a slowdown in growth in the subsequent years.
According to its World Economic Outlook Update, the IMF attributes this positive revision to a "better-than-expected outturn in the third quarter" alongside robust momentum in the fourth quarter, affirming India's status as one of the fastest-growing major economies globally.
The IMF anticipates that India's growth will moderate to 6.4 percent in both 2026 and 2027 as temporary and cyclical factors diminish.
Despite the expected slowdown, India continues to be a pivotal force for growth among emerging and developing economies, with the IMF projecting these economies will expand at slightly over 4 percent in 2026 and 2027.
The region of emerging and developing Asia is benefiting from significant technology-related investments and trade, even as global momentum becomes inconsistent.
The update also highlights that global growth is expected to remain stable at 3.3 percent in 2026, buoyed by easing trade tensions, favorable financial conditions, and a surge in investments related to technology, especially in artificial intelligence.
Inflation trends are looking positive for India as well. The IMF forecasts that inflation in India will return to near target levels following a notable decline in 2025, primarily driven by low food prices, which will further bolster domestic demand.
Nevertheless, the IMF warns that risks to the economic outlook still lean towards the downside. A reevaluation of expectations around AI-induced productivity gains could result in reduced investments and tighter global financial conditions, which could have adverse effects on emerging economies.
On the brighter side, the Fund suggests that quicker adoption of artificial intelligence could enhance global growth, provided that productivity gains are realized and financial risks are managed effectively.
Point of View
I believe this upward revision by the IMF underscores India's resilience in a challenging global environment. While growth moderation is anticipated, India remains a critical player in the global economy, signaling optimism amid uncertainties.
NationPress
20/01/2026
Frequently Asked Questions
What is the new growth projection for India in 2025?
The IMF has raised India's growth projection for 2025 to 7.3%, reflecting a better-than-anticipated economic performance.
Why has the IMF revised India's economic growth forecast?
The revision is attributed to stronger-than-expected performance in the second half of the year.
What is the expected growth rate for India in 2026 and 2027?
The IMF projects India's growth to moderate to 6.4% in both 2026 and 2027.
How does this affect emerging economies?
Despite a slowdown, India continues to be a key driver for growth in emerging market economies.
What are the inflation expectations for India?
The IMF expects inflation in India to return to near target levels in 2025 due to lower food prices.
