IMF forecasts FY26 GDP growth at 6.6%
Cites strong Q2 growth, GST 2.0 reforms
image for illustrative purpose
New Delhi: India’s economy is projected to expand at a healthy pace of 6.6 per cent this year (FY26), up from 6.5 per cent in 2024 (FY25), owing to strong Q2 growth and GST 2.0 reforms, the International Monetary Fund (IMF) on Friday said in its latest regional economic outlook report for Asia.
The forecast for India has improved since April 2025 as strong Q2 growth and the goods and services tax (GST) reform are expected to outweigh the negative effects of higher US tariffs on demand for Indian goods. India’s growth is expected to moderate to 6.2 per cent in 2026, according to the IMF report.
“Economies in the Asia-Pacific region have been resilient in 2025, posting stronger-than-expected economic growth in the first half of the year amid external and domestic challenges. Nevertheless, higher US tariffs and increasing protectionism will likely reduce demand for Asian exports and eventually weigh on growth in the near-term,” said the IMF. China’s growth is expected to moderate to 4.8 per cent in 2025, from 5.0 per cent in 2024.
“India will still expand at a healthy pace of 6.6 per cent this year, the most among major emerging economies,” the IMF noted.
The latest IMF report further stated that higher US tariffs and increasing protectionism will likely reduce demand for Asian exports and eventually weigh on growth in the near-term.
“Amid these forces, policies should focus on increasing regional integration by reducing barriers to trade and investment, and boosting productivity growth with better financial intermediation and allocation of capital.
