International Monetary Fund has upgraded India’s economic growth outlook for FY27 to 7%, marking a 60 basis points increase from its earlier estimate of 6.4%. The revision highlights strong domestic demand, expanding services activity and the impact of structural reforms. India remains one of the fastest growing major economies despite global challenges.
IMF expects India’s growth to stay firm at 7% in FY28 as well. The country had already achieved 7.8% expansion in FY26, slightly higher than the new projections. Other institutions including the Reserve Bank of India, World Bank, OECD and Asian Development Bank have also raised India’s FY27 forecast to around 7.1%, reinforcing confidence in the nation’s economic momentum.
Inflation is projected to ease gradually, with consumer price inflation seen at 5% in FY27 and 4.4% in FY28. The current account deficit is expected to widen to 1.5% of GDP in FY27 from 0.7% in FY26, before moderating to 1.3% in FY28. Risks remain from geopolitical tensions in West Asia, elevated energy prices and global trade disruptions.
Globally, IMF expects growth of 3.1% in 2026 rising to 3.4% in 2027. India’s upward revision contrasts with downgrades for several emerging markets, underlining its strong fundamentals and favourable demographics.
