On Tuesday, 22 April 2025, the International Monetary Fund (IMF) announced the revised India GDP growth forecast of 6.2% for FY26. It was earlier at 6.5%, but the recent geopolitical scenario, especially the ongoing tariff war, and other global uncertainties have weighed on the growth prospects of the economy.
It is not only the FY26, but also for FY27, India’s growth forecast by the IMF has been cut to 6.3% from the previous forecast of 6.5%. While the IMF reduced its forecast but it commented that the growth in India will be the highest amongst all the emerging economies around the world.
According to the World Economic Outlook, this calendar year 2025 will be quite stable for the country as domestic consumption is stable and growing, especially in rural areas.
India Vs. China
With the new IMF forecast, comparisons are being drawn between two of the biggest nations, China and India. It is not just India for which the IMF cut the forecast; China’s growth forecast has also been slashed to 4% from 4.6% for FY26. However, the irony is that while most of these are linked to the imposition of the US tariffs, the US itself witnessed a slash in its growth forecast. IMF reduced the US growth prospect to 1.8% from 2.7%, which was projected just 3 months back in January 2025.
IMF also commented that China and the US will be the two most affected countries due to the new tariffs, and it is not India. That said, it also indicated that while these two nations will feel the heat initially, in the mid-term, the Asian and European economies will also be impacted.
Amidst all this sluggishness, Inflation may give you some hope as the IMF predicted the annual inflation for FY26 to drop to 4.2% and for FY27 it will further go down to 4.1%.
Around the World
While you might be worrying now with the downward revision of India’s GDP growth, India is at one of the best places as of now. As per the IMF, the global GDP growth is about to slow down and thus it has revised the same downward to 2.8% for 2025, while earlier it was anticipated to be around 3.3%.
So, the entire world is slowing down with the trade tensions freshly brewing every day. Though India’s economic growth forecast is better compared to other emerging economies, investors still need to be cautious with the investment choices.
Source: TheEconomicsTimes
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