India's economic growth rate is estimated to be 6.4% in 2025-26, IMF said - stable development will get momentum

The International Monetary Fund (IMF) made a big claim regarding India's economic growth rate. The IMF asserted that India's economic growth rate is projected to be 6.4% in the financial year 2025-2026. The growth rate will gain momentum with high consumption and encouragement of public investment. This will impart momentum to stable development in the country.

The IMF said in the World Economic Outlook (WEO) that the increase in India's economic growth rate reflects a better situation than the forecast of April. Data and estimates for India are presented on a financial year (FY) basis. Growth projections for India are 6.7 per cent for 2025 and 6.4 per cent for 2026.IMF research director Denis Egan stated that India has actually experienced very stable growth. This year and next year, 6.4 per cent growth is predicted, which is a bit higher than the prediction in April. The reason behind this relatively stable growth in India is that the rate of reform is driving high consumption growth and government spending.

He said it will be important for India to continue this momentum and continue the good growth performance we have seen recently. Priorities for India will include boosting job creation, absorbing excess labour from agricultural sectors by providing greater flexibility in the labour market, reskilling workers, continuing to invest in infrastructure and removing trade restrictions.

He said that in the medium term, India needs to continue investing in education, take steps towards land reform, expand social safety nets and reduce red tape so that businesses can perform better. Emerging market and developing economies are expected to grow at 4.1 per cent in 2025 and 4.0 per cent in 2026.

China's growth forecast for 2025 has been raised by 0.8%age points to 4.8 per cent from the forecast made in April. Growth is projected to be 4.2 per cent in 2026, reflecting lower effective tariff rates, the IMF said. Global growth is projected at 3 per cent for 2025 and 3.1 per cent in 2026, the IMF said. The forecast for 2025 is 0.2%age points higher than the reference forecast in the April 2025 World Economic Outlook and 0.1%age points higher for 2026.

The growth rate in advanced economies is projected to be 1.5% in 2025 and 1.6% in 2026. In the United States, the economy is projected to expand at a rate of 1.9% in 2025 due to tariff rates remaining lower than the rates announced on April 2 and the financial situation being loose.