IMF Raises India's GDP Growth Forecast To 7% For FY27 And FY28

India's economy continues to grow at a healthy pace, with the International Monetary Fund (IMF) forecasting India's GDP growth to be 7% for both FY 2026-27 and FY 2027-28 - an increase in the outlook for the country's economic performance despite global headwinds and soaring energy prices.

Following the release of its latest World Economic Outlook on October 13, 2026, the IMF raised India's growth forecast for the fiscal year beginning April 2027 to 7% from 6.4%, and for the following fiscal year to 7% from 6.7%.

Why Has the IMF Raised Its India GDP Growth Forecast?

In its report, the IMF cited India's "robust domestic demand and services sector ... favourable demographics" as contributors to the raise in its growth forecast. With ongoing reforms, India is expected to continue to benefit from its "large domestic market".

India's GDP grew 7.8% in the April-June quarter, per the report, and investment and manufacturing added to the country's economic growth.

India Is One of the World's Fastest-Growing Major Economies

India's large consumer market, its growing population and the strength of its services sector have helped to drive the country's economic growth.

Domestic demand has fuelled India's economic growth despite inflated crude oil prices and geopolitical tensions. Going forward, India will need to continue to invest in the economy, create jobs, increase productivity and ensure stable economic conditions to maintain its growth.

World Bank, OECD Also Raise India Growth Forecasts

India's improving economic outlook has drawn the attention of other international organizations. The World Bank raised its India growth forecast for FY27 to 7.1% from 6.6%, and the Organisation for Economic Co-operation and Development (OECD) raised its projection to 7.1% for FY27 from 6.3%. Other groups, including S&P Global Ratings, Moody's Ratings and the Asian Development Bank, also upgraded their forecasts for India's growth, citing the resilience of the country's domestic economy.

International Monetary Fund Warns of Global Economic Slowdown

India's improving economic outlook comes as the IMF warned of a global economic slowdown. The IMF forecast global economic growth of 3.1% in 2026 and 3.4% in 2027. Inflation, driven by higher energy and food prices, and geopolitical tensions and financial market instability around the world were cited as contributing factors to the slowdown.

India's Economic Growth Outlook

• India's economic growth forecast was upgraded by the IMF, which expects the country to continue to be one of the world's fastest-growing economies.
• India's economic growth in the short term is expected to be driven by strong domestic demand. However, there are several risks to India's economic outlook, including higher inflation, rising interest rates, geopolitical tensions and ongoing international conflicts.
• India's growing economy forecast means that several industries and sectors, including manufacturing, infrastructure, banking, information technology, retail and consumer goods, stand to benefit from the country's economic growth.
• However, it is important to note that a country's forecast economic growth does not necessarily translate into higher stock prices for most companies or higher profits.