India is set to retain its position as the world’s fastest-growing major economy, with the International Monetary Fund (IMF) projecting 7 per cent GDP growth in 2026, driven by resilient domestic demand, strong consumer spending and continued expansion in the services sector.
In its latest World Economic Outlook (WEO) Update, released Wednesday, the IMF forecast India’s economy to grow by 7 per cent this calendar year, before moderating to 6.4 per cent in 2027.
Using India’s fiscal year, which runs from April to March, the IMF expects the economy to expand by 6.4 per cent in FY2026-27, accelerating to 6.7 per cent in FY2027-28. Despite a slight downward revision of 0.1 percentage pointsfor the current fiscal year compared with its April outlook, the Fund raised its projection for the following fiscal year by 0.2 percentage points.
The IMF said India’s growth continues to be supported by robust private consumption and sustained strength in the services sector, helping the country outperform other major economies despite ongoing global uncertainty.
The report noted that India’s economy grew 7.7 per cent in FY2025-26, although global economic conditions have since been affected by geopolitical tensions, including the conflict involving Iran.
Globally, the IMF expects economic growth of 3 per cent in 2026, rising modestly to 3.4 per cent in 2027, placing India’s projected expansion well above the world average.
The Fund said the global economy has shown greater resilience than previously anticipated, with the impact of Middle East tensions remaining relatively contained. Stable commodity prices, anchored inflation expectations and improving financial conditions have helped cushion global markets, while increased investment linked to artificial intelligence and the technology sector has supported economic activity.
Among other major economies, the IMF projects China to grow by 4.6 per cent this year before slowing to 4.1 per cent next year. The United States is forecast to expand by 2.3 per cent in 2026 and 2.2 per cent in 2027, while the European Union is expected to record growth of 0.9 per cent this year and 1.2 per cent next year.
The IMF’s outlook broadly aligns with other international forecasts. The World Bank expects India’s economy to grow 6.6 per cent during the current fiscal year and 7.2 per cent in the following year, while the United Nations has projected 6.4 per cent growth, citing strong consumer demand, public investment and resilient services exports.
The Reserve Bank of India currently forecasts GDP growth of 6.6 per cent for the ongoing fiscal year. Meanwhile, Bank of America recently upgraded its 2026 growth forecast for India to 7 per cent, and Goldman Sachs raised its calendar-year 2026 projection to 6.8 per cent, reflecting growing confidence in the country’s economic outlook.
