Overview
- The IMF raised India’s FY26 growth forecast by 0.7 percentage point to 7.3%, citing a better-than-expected third quarter and strong fourth-quarter momentum.
- Growth is projected to moderate to about 6.4% in both 2026 and 2027, with calendar-year growth seen at 6.3% in 2026 and 6.5% in 2027.
- Global GDP growth is now put at 3.3% for 2026 on brisk AI-related capital spending and reduced U.S. tariff drag, with the IMF assuming an effective U.S. tariff rate near 18.5%, down from about 25%.
- India’s NSO recently lifted its estimate for the year ending March 31 to 7.4%, and the IMF expects India’s inflation to return near the RBI’s target after a food-led decline in 2025.
- The IMF warns of downside risks from lofty AI valuations, potential market corrections, renewed trade or geopolitical tensions, and policy uncertainty, while projecting global headline inflation to ease to 3.8% in 2026 and 3.4% in 2027.