Despite a slowdown, India remains the world’s fastest-growing major economy
New Delhi, January 18: The International Monetary Fund (IMF) has maintained its growth forecast for India at 6.5% for fiscal years 2026 and 2027, as highlighted in its latest World Economic Outlook report.
The global body described India’s growth trajectory as “solid,” aligning with earlier projections. “In India, growth is projected to be solid at 6.5 percent in 2025 and 2026, as projected in October and in line with potential,” the IMF stated.
Economic Slowdown in Q2 FY25
India’s economic growth decelerated in the second quarter of the current fiscal year, expanding by 5.4%, compared to 6.7% in Q1 FY25. This marks a slowdown from the 8.4% growth rate recorded in FY24.
The IMF attributed this dip to a sharper-than-expected slowdown in industrial activity. Despite this, India continues to hold its title as the world’s fastest-growing major economy.
India’s Economic Outlook for FY25 and Beyond
According to the Finance Ministry’s November Monthly Economic Review, uncertainties in global trade have surfaced for FY26, but the report remains cautiously optimistic about India’s economic performance.
The ministry anticipates improved growth in the second half of FY25, stating, “After a moderation in Q2 of FY25, the outlook for Q3 appears bright, as reflected in the performance of HFIs for October and November 2024.”
The report further highlighted pressures on emerging market currencies due to the strong US dollar and potential policy rate adjustments in the United States.
Global Growth Projections
Globally, the IMF forecasted growth at 3.3% for both 2025 and 2026, lower than the historical average of 3.7% (2000–2019). The 2025 projection remains unchanged from the October 2024 World Economic Outlook, reflecting upward revisions for the United States offset by declines in other major economies.
Tags: India GDP, IMF Growth Forecast, World Economic Outlook, Indian Economy, Global Trade, Fiscal 2026
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