IMF lowers India’s growth projection to 6.2% for FY26

The International Monetary Fund (IMF) in its World Economic Outlook (WEO) report for April has lowered the growth projection for India to 6.2% for the fiscal year 2025-26 (FY26), from the earlier estimated rate of 6.5%. The growth of the Indian economy is supported by private consumption, especially in the rural areas, but this rate is 0.3% lower than in the January 2025 WEO estimate, impacted by the trade tensions and global uncertainties.

According to the report, the global growth is projected at 2.8% in 2025, lower by 0.5% than estimated earlier. In 2026, the global economy is estimated to grow at 3%. For advanced economies, the report said that growth under the reference forecast is projected to drop from an estimated 1.8% in 2024 to 1.4% in 2025 and 1.5% in 2026. Growth for 2025 is now projected to be 0.5% lower relative to that in January 2025 WEO update projections.

The forecasts for 2025 include significant downward revisions for Canada, Japan, the United Kingdom, and the United States and an upward revision for Spain. For the United States, growth is projected to decrease in 2025 to 1.8%, 1% lower than the rate for 2024 as well as 0.9% lower than the forecast rate in the January 2025 WEO update.

It said the downward revision is a result of greater policy uncertainty, trade tensions, and a softer demand outlook, given slower-than-anticipated consumption growth. Tariffs are also expected to weigh on growth in 2026, which is projected at 1.7% amid moderate private consumption. After a marked slowdown in 2024, growth in emerging and developing Asia is expected to decline further to 4.5% in 2025 and 4.6% in 2026. Emerging and developing Asia, particularly the Association of Southeast Asian Nations (ASEAN) countries, has been among the most affected by the April tariffs.