IMF Raises India’s GDP Growth Forecast to 7% for FY27

The International Monetary Fund (IMF) has raised its growth estimate for India for the second consecutive financial year in its latest projections, as per news reports. It now expects the economy to expand by 7% in FY27, an increase of 0.6 percentage points from its earlier forecast. 

The Fund has made a further upward revision for FY28, taking that estimate to 7% as well. It cited resilient domestic demand and strong services activity behind the changes. 

Forecasts Move Closer 

The IMF's FY27 estimate follows revisions by the Reserve Bank of India and the World Bank, both of which raised their projections to 7.1% last week. 

In explaining India's growth potential, the Fund pointed to its demographics, a large and expanding domestic market, and continued structural reforms. It also described India as one of the fastest-growing major economies. 

Inflation and External Balance 

The IMF expects consumer price inflation to average 5% in FY27, before falling to 4.4% in FY28. Its current-year estimate is below the RBI's latest projection of 5.2%. 

The current account deficit is projected to rise from 0.7% of GDP in FY26 to 1.5% in FY27. The IMF expects it to come down to 1.3% the following year. 

Global Growth Projections 

The Fund has lifted its 2026 global growth forecast by 0.1 percentage points to 3.1%, while keeping its 2027 estimate at 3.4%. 

Emerging market and developing economies are expected to grow 3.7% in 2026, down from 4.5% in 2025, before recovering to 4.4% in 2027. Advanced economy growth is projected to edge up from 2% in 2025 to 2.1% in 2026. 

Read More: RBI Revises Foreign Exchange Derivative Rules, Introduces 20% Cash Reserve Requirement! 

Conclusion 

The IMF's latest estimates put India’s growth at 7% for two consecutive financial years. The Fund also expects inflation to ease in FY28, while the current account deficit is projected to remain above its FY26 level. 

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.  

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.