IMF raises India's growth forecast to 7% in FY27 on strong domestic demand

The International Monetary Fund (IMF) has raised India's gross domestic product (GDP) growth forecast for 2026-27 by 60 basis points to 7 per cent, citing resilient domestic demand and robust services activity.

In its latest World Economic Outlook, released on Tuesday, the IMF also raised its growth projection for FY28 by 30 basis points to 7 per cent, Financial Express reported. The upgrade reflects stronger-than-expected economic momentum, supported by domestic demand and services, the Fund said.

The IMF attributed India's growth potential to favourable demographic dynamics, a large and expanding domestic market, and continued structural reforms. India remains among the fastest-growing major economies, it said.

The revision follows upgrades by other institutions. The Reserve Bank of India (RBI) and the World Bank raised their FY27 growth projections to 7.1 per cent last week. The IMF expects India's consumer price index inflation to average 5 per cent in FY27 before easing to 4.4 per cent in FY28. The forecast is below the RBI's latest projection of 5.2 per cent for the current financial year.

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