IMF Trims India’s FY27 Growth Forecast to 6.4%, Sees Stronger Rebound in FY28

The International Monetary Fund (IMF) has marginally lowered India’s economic growth forecast for fiscal year 2027 to 6.4 per cent , down from the 6.5 per cent projected in April, while retaining its view that the country will continue to be among the world’s fastest-growing major economies.

In its latest update to the World Economic Outlook (WEO), the IMF said India’s growth would be supported by robust domestic demand, particularly strong private consumption and sustained momentum in the services sector . The multilateral lender also revised its forecast for fiscal year 2028 upward to 6.7 per cent , compared with the 6.5 per cent estimated earlier.

Explaining the revision, Deniz Igan , Division Chief in the IMF’s World Economic Studies division, said recent economic data had been stronger than expected. High-frequency indicators through April pointed to considerable resilience in overall economic activity, reflecting the economy’s underlying strength.

However, the positive momentum has been partly offset by a rise in global energy prices. The IMF noted that higher oil prices and a greater pass-through of fuel costs to domestic pump prices in India weighed on the near-term outlook, leading to the slight downward revision for FY27.

The Fund expects these energy-related pressures to ease over time. As the impact of the energy shock dissipates and economic activity strengthens, growth is projected to improve in FY28, with medium-term growth estimated at around 6.5 per cent .

On the global front, the IMF projected world growth at 3.0 per cent in 2026 and 3.4 per cent in 2027 , broadly unchanged from its April forecast. The organisation said the global economy faces headwinds from the conflict in the Middle East, although these are being partly balanced by a technology-driven upswing fuelled by rapid advances in artificial intelligence and its growing adoption across industries.

Despite the modest downgrade, the IMF’s latest assessment underscores confidence in India’s economic resilience and its position as one of the leading engines of global growth in the years ahead.