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Informist, Tuesday, Apr. 14, 2026

 

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--IMF raises India's GDP growth forecast for FY27 by 10 bps to 6.5%
--IMF raises India's GDP growth forecast for FY28 by 10 bps to 6.5%
--IMF: Lower US tariffs to outweigh West Asia war hit on India's growth
--IMF: Inflation in India expected to return to near RBI's 4% target
--IMF projects India FY27 inflation at 4.7%, FY28 at 4.0%
--IMF sees India's CAD widening to 2% of GDP in FY27 from 0.9% in FY26
--IMF cuts global GDP growth forecast for 2026 by 20 bps to 3.1%
--IMF cuts US GDP growth forecast for 2026 by 10 bps to 2.3%
--IMF cuts China's GDP growth forecast for 2026 by 10 bps to 4.4%
 

 

NEW DELHI – The International Monetary Fund has raised its forecast for India's GDP growth in the current financial year started Apr. 1 by 10 basis points to 6.5%, citing continued momentum from FY26 and lower US tariffs. The reduction in US tariffs on Indian goods to 10% from 50% will also outweigh the adverse impact of the war in West Asia, the IMF said in its April edition of the World Economic Outlook report.

 

The IMF also raised India's growth forecast for FY28 by 10 bps to 6.5%. The Indian economy grew 7.8% in the December quarter and is projected to grow 7.6% in FY26, according to the government's second advance estimate. Earlier this month, the World Bank had also raised its forecast for India's GDP growth in FY27 by 10 basis points to 6.6%.

 

Both the IMF and the World Bank's projections for India's growth in FY27 are lower than the Reserve Bank of India's forecast of 6.9%.

 

The IMF expects inflation to rise to the RBI's medium-term target of 4% in FY27 after "subdued food prices drove a marked decline" in FY26. It sees CPI inflation rising to 4.7% this year from 2.1% in FY26. Inflation is then expected to ease to 4% in FY28, the IMF said. CPI inflation rose to a 12-month high of 3.4% in March. The RBI projects inflation to average 4.6% in FY27.

 

India's current account deficit is projected to widen to 2% of GDP in FY27 from an estimated 0.9% in FY26, the IMF said. The current account deficit is seen moderating to 1.6% of GDP in FY28, as per the IMF.

 

GLOBAL FORECASTS

The IMF lowered its forecast for global growth in 2026 by 20 bps to 3.1%, largely reflecting the impact of the war in West Asia. It projects growth in 2027 at 3.2%, lower than the 3.4% growth seen in 2025.

 

"Once again, the global economy is threatened with being thrown off course – this time by the outbreak of war in the Middle East at the end of February 2026," the IMF said. "The Middle East conflict presents a significant counterforce to these tailwinds through its impact on commodity markets, inflation expectations, and financial conditions."

 

If not for the war, global growth would have been revised upward, the IMF said. "Indeed, forecasts based on pre-conflict assumptions would have shown a slight upward revision of 2026 growth relative to the January WEO (world economic outlook) Update, by 0.1 percentage point, to 3.4 percent." 

 

The IMF cut its US GDP growth forecast for 2026 by 10 bps to 2.3%. It sees the US economy growing 2.1% in 2027. For China, the IMF projected growth this calendar year at 4.4%, 10 bps lower than previously projected. China is projected to grow 4.0% in 2027, the IMF said.  End

 

Reported by Shubham Rana

Edited by Avishek Dutta

 

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