IMF Revises India's FY27 GDP Growth Forecast to 6.4%; Sees Recovery to 6.7% in FY28

The International Monetary Fund (IMF) has revised India's GDP growth forecast for FY2026-27 (FY27) to 6.4%, slightly lower than its 6.5% estimate released in April. Despite the marginal downgrade, the IMF said India will remain among the world's fastest-growing major economies, supported by resilient domestic demand and a robust services sector.

In its latest World Economic Outlook (WEO) update, the IMF also raised India's growth projection for FY2027-28 (FY28) to 6.7%, up from the 6.5% forecast made earlier this year.

Why Did the IMF Revise India's Growth Forecast?

The IMF attributed the slight downgrade for FY27 to higher energy prices and their pass-through to domestic fuel costs.

According to the fund, recent economic data has been stronger than expected, while high-frequency indicators through April point to continued resilience in economic activity. However, the positive momentum is expected to be partially offset by elevated oil prices, which could weigh on growth during FY27.

Looking ahead, the IMF expects the impact of higher energy prices to ease, paving the way for stronger economic expansion in FY28.

What's Driving India's Economic Growth?

The IMF said strong private consumption and services activity continue to underpin India's growth momentum.

Explaining the outlook, Deniz Igan, Division Chief of the IMF's World Economic Studies Division, noted that better-than-expected recent economic data and resilient high-frequency indicators supported the revised forecasts. The fund expects economic activity to strengthen further in FY28 as the energy shock dissipates and growth gradually returns to its medium-term trend of around 6.5%.

Global Growth Outlook Remains Steady

Globally, the IMF projects economic growth of 3% in 2026 and 3.4% in 2027, broadly unchanged from its April forecast.

The fund said the modest slowdown reflects the impact of the conflict in the Middle East, which is partly offset by stronger demand driven by the global artificial intelligence (AI) boom. While higher energy prices continue to affect energy-importing countries, economies benefiting from AI-led technological advancements are expected to see stronger economic activity.

Read more: Best Monopoly Stocks in India for July 2026 Based on 5-Year CAGR: Coal India, MCX and Others.

Conclusion

Although the IMF has marginally lowered India's FY27 growth forecast to 6.4%, the country continues to stand out as one of the fastest-growing major economies. With private consumption, services activity, and resilient domestic demand supporting growth, the IMF expects India's economy to regain momentum in FY28 as energy-related pressures begin to ease.

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