IMF Raises India's 2026 Growth Forecast to 7%, Citing Resilient Domestic Demand
- IBEF
- October 14, 2026
The International Monetary Fund (IMF) raised India’s economic growth forecast for 2026 to 7%, from 6.4% projected in July, citing stronger-than-expected economic momentum, resilient domestic demand and robust services activity despite higher global oil prices. According to the IMF’s October 2026 World Economic Outlook, India stands out among emerging and developing economies facing a weaker medium-term outlook due to geopolitical tensions and energy market pressures. The growth forecast was revised upwards by 0.6 percentage points from July and 0.5 percentage points from April. The IMF also raised India’s growth projection for 2027 to 7%, an increase of 0.3 percentage points from July and 0.5 percentage points from April. Sustained economic activity, favourable demographic trends, a growing domestic market and structural reforms were identified as factors supporting India’s growth potential.
The IMF’s upward revision reflects India’s resilience amid global economic uncertainty, with domestic demand and services activity helping cushion the impact of higher oil prices. The Fund also noted that the artificial intelligence (AI) boom has supported economic activity in Asia, with India and China emerging as major growth drivers. China’s growth is projected to moderate to 4.5% in 2026 and 4% in 2027, amid higher oil prices, prolonged uncertainty and structural challenges. Globally, output is projected to grow at an average annual rate of 3.2% during 2028-31, below the pre-pandemic average of 3.7% recorded during 2000-19. Despite the improved outlook, India remains exposed to elevated oil prices and persistent global uncertainty, which could weigh on demand and economic growth. The revised projections add to a broader improvement in forecasts by international institutions, including the World Bank and the Organisation for Economic Co-operation and Development (OECD).
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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