India’s growth trajectory remains strong and in line with its potential: IMF

The International Monetary Fund (IMF) has projected India's economic growth to remain steady at 6.5% for 2025 and 2026, as stated in its latest World Economic Outlook update. This projection aligns with the forecast shared in October 2024. While growth remains solid, the IMF noted that the deceleration in India’s industrial activity has been sharper than expected, contributing to the slowdown.

India's growth rate was recorded at 8.2% in 2023 but dropped to 6.5% in 2024. The IMF expects this figure to hold steady through 2026. The report also highlighted global economic growth trends, forecasting a stable yet subdued global growth rate of 3.3% in 2025 and 2026—below the historical average of 3.7% from 2000 to 2019.

“Growth in India slowed more than anticipated, led by a sharper-than-expected deceleration in industrial activity,” the IMF stated. Despite this, the organization emphasized that India’s growth trajectory remains strong and in line with its potential.

On a global scale, headline inflation is anticipated to decline to 4.2% in 2025 and further to 3.5% in 2026. Inflation in advanced economies is expected to reach target levels sooner than in emerging markets and developing economies. IMF Chief Economist Pierre-Olivier Gourinchas noted that this decline in inflation will mark the easing of recent global disruptions, including the COVID-19 pandemic and geopolitical tensions stemming from Russia's invasion of Ukraine, which drove the largest inflation surge in four decades.

In the United States, growth is forecasted at 2.7% for 2025, supported by strong demand, wealth effects, a less restrictive monetary policy, and favorable financial conditions. Meanwhile, China's growth is projected to reach 4.5% in 2025, a 0.4 percentage point increase from earlier forecasts.

The IMF concluded that while global growth remains stable, it is expected to stay lackluster compared to historical averages. For India, however, a steady 6.5% growth rate signals resilience amid global economic uncertainties.