It raised the FY28 growth projection to 6.7% from 6.5%. According to the National Statistical Office, India’s gross domestic product (GDP) expanded 7.7% in FY26.
Based on the IMF’s latest projections, India is expected to record the highest growth rate among advanced economies and emerging markets and developing ones over the current and next fiscal year.
“India remains among the fastest-growing major economies, with growth projected at 6.4 percent, supported by strong momentum in private consumption and services activity,” the IMF said in its latest World Economic Outlook.
The IMF said that although risks to the global outlook are more balanced than they were in April, they remain tilted to the downside. It warned that a renewed escalation of the Middle East conflict could prolong volatility in commodity markets, disrupt global supply chains, push up prices, and tighten financial conditions.
US President Donald Trump on Wednesday said the US-Iran ceasefire is over, following exchanges of strikes between the two countries.
On the upside, the IMF cited risks including a swifter-than-expected normalization in energy markets, stronger investment in artificial intelligence and other technologies, reduced trade barriers through greater international cooperation, and structural reforms that could boost medium-term global growth.The IMF projections are slightly below the Reserve Bank of India’s growth estimate of 6.6% for FY27. Last month, the World Bank raised India’s FY27 growth forecast to 6.6% from the 6.5% estimated in January.
On a calendar year basis, the IMF forecasts the Indian economy to grow 7% in 2026 and 6.4% in 2027.
Globally, the IMF lowered its 2026 growth forecast to 3% from 3.1%, reflecting the economic impact of the Middle East conflict. However, stronger demand driven by artificial intelligence (AI) and its wider adoption is expected to partially offset the slowdown.
Global growth forecast for 2027 has been raised to 3.4% from 3.2%.
The US growth forecast for 2026 remains unchanged at 2.3% and slightly increased to 2.2% from 2.1% for 2027. The IMF noted that the US economic activity continues to be supported by expansionary fiscal policy, accommodative financial conditions, and sustained investment in technology, while the country’s status as a net energy exporter has limited the impact of the Middle East conflict.
China’s growth forecast for 2026 has been upgraded to 4.6% from 4.4%, although it remains lower than the 5% growth recorded in 2025. According to the IMF, higher oil prices, prolonged uncertainty, and structural challenges are expected to weigh on China’s economy.
The IMF also projected global inflation to increase to 4.7% in 2026 from 4.1% in 2025, before easing to 3.9% in 2027, mainly due to higher energy and food prices.