NEW DELHI, October 25, 2025: The International Monetary Fund (IMF) has projected that India’s economy will grow by 6.6 percent in the fiscal year 2025-26, outpacing China’s 4.8 percent, according to the Fund’s latest World Economic Outlook report released on Friday. The IMF’s updated forecast reflects India’s stronger-than-expected performance in the first quarter of the current fiscal year and continued resilience in domestic demand.
The report attributes this growth momentum to robust private consumption, expanding manufacturing and services sectors, and sustained public and private investment activity, which have together offset global trade headwinds. For China, the IMF estimates growth of 4.8 percent for 2025-26, a moderation from previous years as the world’s second-largest economy faces slowing investment and weaker export demand. The figures highlight an expanding gap between the two largest emerging economies, with India maintaining its position as one of the world’s fastest-growing major markets.
Globally, the IMF projects economic growth of 3.2 percent in 2025 and 3.1 percent in 2026, indicating a modest deceleration amid persistent inflationary pressures, subdued trade, and tighter financial conditions. Advanced economies are expected to grow at an average of 1.6 percent, while emerging and developing economies, including India and China, are forecast to average around 4.2 percent. The IMF report noted that the impact of higher trade tariffs and export restrictions by advanced economies has been less severe on India than initially anticipated.
IMF raises India’s GDP forecast for 2025-26
The Fund cited a “carry-over effect” from India’s strong start to the fiscal year as a key reason for the upward revision, while cautioning that growth could stabilize around 6.2 percent in 2026 as the effect moderates. The Indian government’s own estimates for fiscal 2025-26 place GDP growth between 6.3 and 6.8 percent, in line with the IMF’s assessment. The consistency of these projections reinforces expectations that India will continue to be a leading contributor to global economic expansion through 2026.
The IMF report also emphasized the importance of maintaining fiscal discipline and implementing ongoing reforms to sustain long-term growth. It pointed to potential risks such as weaker external demand, persistent trade protectionism, and financial market volatility that could weigh on emerging economies. India’s stronger-than-anticipated outlook contrasts with slower recovery trends in several major markets, underscoring the resilience of its domestic economy amid global uncertainty.
India outpaces China in IMF’s latest growth outlook
With solid consumption, expanding industrial output, and rising investment levels, the IMF’s projections position India as a principal driver of global growth in 2025-26. In summary, the IMF’s latest assessment confirms that India is on track to outperform China in economic growth during the upcoming fiscal year, supported by firm domestic fundamentals and a favorable early-year performance. The report situates India as a stabilizing force within a global economy characterized by uneven recovery and modest overall expansion. – By Content Syndication Services.