The International Monetary Fund (IMF) on Tuesday cut India's economic growth forecast to 6.2% from 6.5% for the current financial year. It has cited ongoing trade tensions as a reason to revise India's growth forecast downward from the January prediction.
"For India, the growth outlook is relatively more stable at 6.2% in 2025 supported by private consumption, particularly in rural areas," the IMF said in its World Economic Outlook report.
Looking ahead, the multilateral agency also revised its forecast for FY27, pegging India’s growth at 6.3%—a notch below the previous estimate of 6.5%. The IMF attributed the dip to rising global uncertainty and heightened trade friction. Despite the downgrade, based on IMF projections, India's economic growth forecast is set to be the highest among emerging and advanced economies.
Global Growth
The IMF has also trimmed its growth estimates for key global economies including the United States and China, citing the impact of reciprocal tariffs, now at 100-year highs, and warned that rising trade tensions would further slow growth.
China’s GDP is now projected to grow at 4% in 2025, down from 4.6% earlier. The US economy, too, is expected to slow, with growth revised downward by 90 basis points to 1.8%.
The multilateral lending agency said that overall global growth is expected to declining by 50 basis points (bps) from an estimated 3.3% in 2024 to 2.8% in 2025. It will then recover to 3% in 2026, 30 bps lower than the January projection.
India's Domestic Outlook
Back home, the Economic Survey has estimated India’s GDP growth for FY26 in the range of 6.3–6.8%. Meanwhile, the Ministry of Statistics and Programme Implementation has maintained its FY25 forecast at 6.5%.
Meanwhile, the Reserve Bank of India also revised India's GDP to 6.5% in FY26 from the 6.7 per cent projected in February following its Monetary Policy Committee meeting earlier this month.
