Growth is projected to ease to 6.4 per cent in 2026 and 2027 as temporary and cyclical factors supporting the economy begin to wane.

The International Monetary Fund (IMF) on Monday raised its growth forecast for India for the 2025–26 financial year, citing stronger-than-expected momentum in recent quarters, even as it flagged a moderation in the years ahead once cyclical tailwinds fade.

In its latest outlook, the global agency revised India’s GDP growth estimate for FY26 upward by 0.7 percentage points to 7.3 per cent, reflecting a better-than-anticipated performance in the third quarter and sustained strength heading into the fourth.

The Fund, however, expects this pace to cool over the medium term. Growth is projected to ease to 6.4 per cent in 2026 and 2027 as temporary and cyclical factors supporting the economy begin to wane.

The upgrade follows a reassessment earlier this month by the National Statistics Office, which raised its estimate for growth in the year ending March 31 to 7.4 per cent, above the government’s initial projection range of 6.3 per cent to 6.8 per cent.

In its previous staff report, the IMF had projected 6.6 per cent growth for FY26, driven largely by domestic consumption. Stronger-than-expected economic activity in the third quarter altered that assessment.

The IMF’s revised outlook broadly aligns with other multilateral assessments. The World Bank earlier this month raised its FY26 growth forecast for India to 7.2 per cent, pointing to resilient domestic demand despite higher US tariffs.

The World Bank earlier this month raised its FY26 growth forecast for India to 7.2 per cent, pointing to resilient domestic demand despite higher US tariffs.