IMF Says Indian Economy Will Grow At 6.5% In FY27 Amid Global Uncertainities | Here's Why

New Delhi: Amid global slump, especially on the backdrop of the raging war and fragile ceasefire in the Middle East, the International Monetary Fund (IMF) has raised India's growth forecast upward to 6.5% in the Financial Year 2027. This comes amid increasing geopolitical tensions and slowing global demand.

This comes after the Indian economy grew at a strong momentum in 2025, during which the country performed better than expected, owing to steady domestic demand. The IMF has also revised India’s growth estimate for 2025 to 7.6%.

Lower US Tariffs

As per several business analysts, one of the reasons behind the improved projections is due to the reduction in additional US tariffs, from 50% to 10%, on Indian goods, which has eased pressure on Indian exports. It has also helped to bring down the negative impact from global tensions, especially the war in the Middle East, where uncertainties have dragged on for over a month now.

The IMF expects India’s growth trajectory to stay at 6.5% in 2027, suggesting a stable path for the next financial year, indicating that the growth rate is expected to stay consistent in the middle term.

Global Pressures Loom

Despite an improved economic outlook for the Indian economy, growth in Asia is expected to slow down in the next two years. The global monetary body has also highlighted that despite stable growth projections in India, the Middle East war has the potential to disrupt trade, tourism, financial conditions and remittance in several countries. 

Countries that depend on a high volume of energy imports or funding from external economies may feel the impact of the war more. These include countries in South and Southeast Asia that may witness weak domestic demand, which may in turn lead to downward revisions in their growth forecasts.

The Managing Director of the IMF, Kristalina Georgieva, had warned that the Middle East war may lead to consequences for growth, inflation, and energy markets. Georgieva, in a curtain-raiser speech ahead of the IMF-World Bank Spring Meetings, said the war led to a disruption of oil and gas supplies, damaged critical infrastructure, and heightened uncertainty in global trade and transport routes.

"The conflict has caused considerable hardship around the globe. My heart goes out to all people affected by this war and all wars," noted the IMF Director

"Take Qatar's Ras Laffan complex--a tremendously important example of strategic investment done right; producer of 93 per cent of the Gulf's LNG, some 80 per cent of it going to Asia-Pacific, a region that now endures serious fuel shortages. Ras Laffan has essentially been shut since March 2, took direct hits on March 19, and could take 3-5 years to restore to full capacity," she said. (With ANI inputs)

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