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Informist, Wednesday, Jul. 8, 2026

 

--IMF cuts India's GDP growth forecast for FY27 by 10 bps to 6.4%

--IMF raises India's GDP growth forecast for FY28 by 20 bps to 6.7%

--IMF projects India's GDP growth in 2026 at 7%, 2027 at 6.4%

--IMF: India among fastest-growing econs on strong private consumption

--IMF: India among fastest-growing econs on strong services activity

--IMF raises China GDP growth forecast for 2026 by 20 bps to 4.6%

--IMF keeps US GDP growth projection for 2026 unchanged at 2.3%

--IMF pegs global GDP growth at 3% in 2026, 3.4% in 2027

--IMF sees global inflation averaging 4.7% in 2026, 3.9% in 2027

--IMF: Developments in West Asia key risk to baseline forecasts

 

NEW DELHI – The International Monetary Fund has lowered its projection for India's GDP growth in 2026-27 (Apr-Mar) by 10 basis points to 6.4% amid geopolitical risks emanating from the West Asia war. However, India continues to be among the fastest growing economies on the back of strong demand in private consumtion as well as services activity, the IMF said Wednesday in the July edition of its World Economic Outlook report.

 

The financial institution raised its India growth forecast for FY28 by 20 basis points from its April projection to 6.7%. The latest projections were based on the assumption that the Strait of Hormuz will reopen in mid-July, with conditions broadly coming back to pre-West Asia war levels by March 2027, the IMF said.

 

The Indian economy grew 7.8% in the March quarter and 7.7% in FY26, based on the new GDP series with FY23 as the base year. The IMF projection for India's growth in FY27 is 20 basis points lower than the Reserve Bank of India's forecast of 6.6%. In June, the central bank had cut India's FY27 growth forecast by 30 bps, reflecting the risks arising from the West Asia war.

 

GLOBAL OUTLOOK

The IMF has cut its projection for global growth in 2026 by 10 bps to 3%, a modest slowdown as the effects of the war are being partly offset by accelerated demand-driven momentum in the global technology cycle, it said. The multilateral body projects global growth in 2027 at 3.4%, 20 bps higher than the April estimate but 10 bps lower than the 3.4% growth seen in 2025. 

 

The Washington-based institution sees global headline inflation averaging 4.7% in 2026, 60 bps higher than a year ago, mainly driven by higher energy and food prices. "Slightly revised upward from April, these projections indicate that the disinflation trend in place since the beginning of 2024 has stalled," the IMF said. It sees global inflation moderating to 3.9% in 2027.

 

"Driven by surging energy prices, global headline inflation rose for a third month in a row year over year in May, breaking the downward trend that has been in place since the beginning of 2024," IMF said. "Inflation dynamics are expected to remain uneven across countries, reflecting differences in exchange rate pass-through, the persistence of services price inflation, labor market conditions, and the growing importance of country-specific factors," IMF said in the report.

 

The report noted that the risk to baseline forecasts stem mainly from developments in West Asia. "Reescalation of geopolitical tensions would hurt growth and compound inflationary pressures," IMF said. "The possibility of renewed Middle East conflict looms large and could extend commodity price volatility, further threaten supply chains, raise prices, and weigh on financial conditions."

 

The IMF kept the US GDP growth projection for this calendar year unchanged at 2.3%, and projected it to grow 2.2% in 2027. For China, the IMF raised its growth forecast for 2026 by 20 bps to 4.6% and pegged China's growth in 2027 at 4.1%.  End

 

Reported by Shweta

Edited by Avishek Dutta

 

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