IMF Projects India at 6.4% Growth Through 2027, Far Ahead of Global Peers

India will remain the world’s fastest-growing major economy over the next two years, with the International Monetary Fund projecting GDP growth of 6.4% in both 2026 and 2027, even as global economic expansion stays well below pre-pandemic averages.

In its latest World Economic Outlook, the IMF also delivered a significant upgrade to India’s near-term outlook, raising the 2025 growth estimate to 7.3%, reflecting stronger-than-expected domestic momentum through the second half of the year.

Growth to Moderate After Strong 2025 Performance

The IMF expects India’s growth to ease from 7.3% in 2025 to 6.4% over the following two years, describing the moderation as a natural return toward the economy’s medium-term potential rather than a sign of weakness. “In India, growth is revised upward by 0.7 percentage point to 7.3 percent for 2025, reflecting the better-thanexpected outturn in the third quarter of the year and strong momentum in the fourth quarter. Growth is projected to moderate to 6.4 percent in 2026 and 2027 as cyclical and temporary factors wane,” said the IMF. 

The Fund attributed India’s recent strength to robust private consumption, sustained public investment and a resilient services sector. It also noted that base effects and the unwinding of post-pandemic catch-up demand will temper growth going forward.

Despite the moderation, India’s expansion remains well above the global average, thus reinforcing its position as a key driver of world growth.

Also read: IMF Flags Resilient 2026 Outlook Despite Trade Headwinds, Bets on AI Boo

India Stands Out As Global Growth Slows

The IMF’s projections highlight a widening gap between India and other major economies:

• Global GDP growth is forecast at 3.3% in 2026 and 3.2% in 2027, nearly half of India’s projected pace.
• Advanced economies are expected to grow significantly slower, constrained by tighter financial conditions and weaker productivity gains.
• Growth across emerging markets remains mixed, with India emerging as a clear outperformer.

The Fund said global activity continues to face headwinds from trade fragmentation, geopolitical uncertainty and uneven recovery across regions, even as inflation pressures gradually ease.

Inflation and Policy Backdrop Supportive

India’s growth outlook is underpinned by a relatively stable macroeconomic environment. The IMF expects inflation to remain broadly within the Reserve Bank of India’s tolerance band, helped by easing food price pressures and calibrated monetary policy.

Steady inflation, combined with continued capital spending on infrastructure and manufacturing, is expected to support demand without creating significant macroeconomic imbalances.

What It Means For Business And Markets?

For businesses and investors, the IMF’s projections reinforce India’s position as a high-growth market in a low-growth global environment.

Sustained expansion at the 6.4% level is expected to:

• Support corporate earnings growth
• Attract foreign investment into manufacturing, infrastructure and services

Strengthen India’s role in global supply chains amid diversification away from concentrated production hubs

Also read: Budget 2026: Morgan Stanley On Sector-Wise Key Reforms Required