IMF Projects India to Remain Fastest-Growing Major Economy in 2025-26 with 6.6% Growth

According to the International Monetary Fund (IMF), India will continue to be among the fastest-growing emerging market and developing economies in 2025-26. In its October 2025 World Economic Outlook (WEO) report, the IMF revised India’s growth projection upward to 6.6%, citing strong first-quarter performance that has more than offset the impact of US tariffs on Indian exports.

This revision reinforces India’s economic resilience amid global uncertainty, supply chain disruptions, and trade tensions.

India Outpaces China and Other Major Economies

The IMF report highlights that India’s growth rate of 6.6% will outpace China’s projected 4.8% growth in 2025-26. This positions India as the fastest-growing large economy globally.

While advanced economies are projected to grow at an average rate of 1.6%, emerging markets and developing economies are expected to expand by 4.2%—well below India’s growth rate.

Among advanced economies, Spain is forecasted to grow the fastest at 2.9%, followed by the United States (1.9%), Canada (1.2%), and Japan (1.1%). In Latin America, Brazil is expected to grow at 2.4%.

India’s Economic Strength: The Q1 Momentum Effect

The IMF attributes India’s strong growth to a carryover effect from robust first-quarter performance, when GDP expanded by 7.8%. This early momentum helped offset external challenges such as US tariffs and global trade tensions.

In 2024-25, India’s economy had already grown by 6.5% in real terms, driven by strong domestic consumption, services growth, and public investment.

The Indian government, meanwhile, continues to project GDP growth in the 6.3%–6.8% range for 2025-26, reflecting confidence in macroeconomic stability and domestic demand.

Global Growth Outlook: Slower but Stable

Globally, the IMF projects world GDP to grow by 3.2% in 2025, before slightly slowing to 3.1% in 2026. These figures remain below the pre-policy-shift forecasts, largely due to the continuing effects of trade barriers and geopolitical uncertainty.

Inflation is expected to gradually decline worldwide, though it remains above target in the United States and subdued in most other economies.

The IMF also warned that prolonged uncertainty, increased protectionism, and labour supply shocks could further dampen growth prospects.