What is the IMF's revised growth outlook for India?
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Synopsis
In a surprising twist, the IMF has upped India's growth forecast to 6.6%. What does this mean for the Indian economy? Discover the implications of this revision in our latest report.
Key Takeaways
- IMF raises India’s growth forecast to 6.6%
- Strong Q1 performance offsets US tariff impact
- Growth projected at 6.2% for 2026
- Kudos to Indian government for reforms
- Global economy expected to grow at 3.2%
Washington, Oct 14 (NationPress) The International Monetary Fund has revised its forecast for India’s growth, now estimating it at 6.6 percent, which reflects an increase of 0.2 percentage points in its latest Global Economic Outlook report.
According to the IMF's report unveiled in Washington on Tuesday, the robust performance of India's economy in the first quarter of 2025 is effectively mitigating the impact of increased US tariffs on Indian imports.
"In India, growth is projected to stand at 6.6 percent in 2025… This marks an upward adjustment compared to the July WEO update, with the strong first quarter performance more than balancing the rise in the US effective tariff rate on imports from India since July," the report indicated.
Nevertheless, a modest decline is anticipated for 2026, with a forecasted growth rate of 6.2 percent, which is 0.2 percentage points lower than previously estimated.
India's economy demonstrated remarkable growth of 7.8 percent during the April-July quarter, surpassing all expectations.
On Monday, IMF Managing Director Kristalina Georgieva praised India's growth trajectory as "impressive," commending the government's policy and tax reforms.
"I have immense faith in India because of the audacity with which they tackle challenges deemed impossible by others. For instance, digital identity. Many claimed achieving universal digital ID was unfeasible, yet they have proven the skeptics wrong," she remarked.
Just last week, the World Bank also upgraded its growth forecast for India for 2025 from 6.3 percent to 6.5 percent.
As India continues on its growth trajectory, the IMF anticipates that the global economy will experience a modest growth of 3.2 percent this year.
The IMF assessed that the impact of Trump's tariffs is less severe than initially anticipated.
"Due to numerous trade agreements and exemptions, most countries have avoided retaliation, maintaining an open trading environment, while the private sector has adeptly maneuvered by advancing imports and adjusting supply chains," stated IMF Chief Economist Pierre Olivier Gourinchas on Tuesday.
However, he cautioned that the "tariff shock is present" and is further diminishing already weak growth prospects, particularly in the United States.
"Even in the US, growth projections have been reduced compared to last year. The labor market is softening, and inflation remains persistently above target, indicating that the economy is facing a negative supply shock," he noted.
The IMF has slightly adjusted its growth forecast for the US economy, revising it from 1.9 percent to 2 percent in 2025.
Point of View
The IMF's revision highlights India's resilience in the face of global economic challenges. The government's proactive approach in implementing reforms is commendable. As the nation continues to navigate through economic uncertainties, it remains essential to focus on sustainable growth strategies that bolster both domestic and international confidence.
NationPress
14/10/2025
Frequently Asked Questions
What is the new growth projection for India by IMF?
The IMF has raised India's growth projection to 6.6% for 2025.
How does the IMF see the impact of US tariffs on India?
The IMF believes that India's strong growth is offsetting the impact of the increased US tariffs on its imports.
What is the growth projection for 2026 according to IMF?
The IMF projects a growth rate of 6.2% for India in 2026.
What did IMF Managing Director Kristalina Georgieva say about India?
She referred to India's growth journey as impressive and praised the government's bold reforms.
What is the global economic outlook according to IMF?
The IMF expects the global economy to grow at a modest rate of 3.2% this year.
