The International Monetary Fund (IMF) has increased its Gross Domestic Product (GDP) growth forecast for India by 60 basis points, bringing it to 7 percent for the fiscal year 2026–2027. This increase is attributed to sustained domestic demand and activity in the services sector.
According to the IMF's latest report, 'World Economic Outlook,' published on Tuesday, the fund also raised its growth forecast for the fiscal year 2028 by 30 basis points, setting it at 7 percent. The fund noted that this improvement reflects a stronger-than-expected economic momentum supported by domestic demand and services.
The IMF links India's growth potential to favorable demographic dynamics, the presence of a large and growing domestic market, and ongoing structural reforms. The fund emphasized that India continues to be one of the largest fast-growing economies.
This adjustment comes after upward revisions from other institutions. Last week, the Reserve Bank of India (RBI) and the World Bank also raised their growth forecasts for the fiscal year 2027 to 7.1 percent. The IMF expects consumer price inflation in India to average 5 percent in the fiscal year 2027 before declining to 4.4 percent in the fiscal year 2028. This forecast is lower than the latest RBI projection of 5.2 percent for the current fiscal year.