IMF pares India’s growth forecast to 6.4% for 2027 fiscal from 6.5% in April

India’s economy is expected to grow at 6.4 per cent in fiscal year 2027, a tad slower than the 6.5 per cent projected in April, the International Monetary Fund (IMF) said on Wednesday. The IMF, in its update to the World Economic Outlook (WEO), projected India to grow at 6.7 per cent in fiscal year 2028, an increase of 20 basis points from the 6.5 per cent growth projected in April.

"India remains among the fastest-growing major economies, with growth projected at 6.4 per cent supported by strong momentum in private consumption and services activity,” the IMF said.

"Factors that are underpinning the forecast revisions are basically twofold. On the upside, we have the better-than-expected out turn in the most recent data, but we also have high-frequency indicators through April showing quite a bit of resilience in overall economic activity,” Deniz Igan, Division Chief (World Economic Studies), told reporters here on projections for India. But these positive effects are then more than offset for 2026 by the higher energy prices in the baseline and in the July update, as well as the greater pass-through of those higher oil prices to prices at the pump in India, she said.

"Moving into 2027, the IMF expects a strengthening of the economy with the energy shock dissipating and medium-term growth being estimated at around 6.5 per cent, and output closing, we expect some pickup there,” Igan added.

Global growth is projected to be 3 per cent in 2026 and 3.4 per cent in 2027, down from the average of 3.5 per cent observed in 2024–25 and broadly unchanged on a cumulative basis compared with the forecasts in April.

The modest slowdown reflects the effects of the war in the Middle East, being partly offset by accelerated demand-driven momentum in the global technology cycle thanks to advances in artificial intelligence (AI) and its adoption, the IMF said.

The impact varies widely based on countries’ exposure to the war and position in the technology value chain, it said.

Energy exporters outside the conflict zone benefit from favourable terms of trade, whereas economies plugged into the technology-led upturn experience stronger activity even if they are energy importers, the IMF said.