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India to Remain World's Fastest-Growing Major Economy Through 2027: IMF

The International Monetary Fund projects India will retain its status as the world's fastest-growing major economy, with growth estimated at 7.3% in 2025 before moderating to 6.4% in both 2026 and 2027. This outlook significantly outperforms the projected global growth of 3.3% and surpasses other major economies like the United States and China. India's robust performance is supported by strong domestic demand, sustained public investment, and a recovery in private capital expenditure. The IMF also notes that inflation in India is expected to return to target levels following a decline driven by subdued food prices.

Key Points: IMF: India Fastest-Growing Major Economy 2026-2027

  • 6.4% growth in 2026 & 2027
  • Outpaces global average of 3.3%
  • Led by resilient domestic demand
  • Stronger than China, US, Euro Area
  • Inflation returning to target
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India to grow 6.4% in 2026, 2027, remain fastest-growing major economy: IMF

IMF projects India's GDP growth at 6.4% in 2026 & 2027, outpacing China, US, and Euro Area, driven by strong domestic demand and investment.

"Growth is projected to moderate to 6.4 percent in 2026 and 2027 as cyclical and temporary factors wane - IMF"

New Delhi, January 19

India is set to retain its position as the world's fastest-growing major economy over the next two years, even as global growth shows signs of moderation, according to the International Monetary Fund's World Economic Outlook Update released in January 2026.

The IMF estimates India's economy to grow by 7.3 per cent in 2025, followed by 6.4 per cent in both 2026 and 2027, significantly outperforming global and advanced economy averages.

On the contrary, world economy is projected to expand at 3.3 per cent in 2025 and 2026, before easing slightly to 3.2 per cent in 2027.

India's robust outlook is underpinned by resilient domestic demand, sustained public investment, and a gradual recovery in private capital expenditure.

Compared to other major economies, India's growth trajectory remains notably stronger: the United States is projected to grow at 2.4 per cent in 2026, China at 4.5 per cent, and the Euro Area at a modest 1.3 per cent.

Among emerging and developing Asian economies, India continues to lead, outpacing regional peers and contributing significantly to Asia's projected 5.0 per cent growth in 2026.

The IMF notes that emerging market and developing economies as a group are expected to grow at 4.2 per cent in 2026, well below India's projected pace.

"In India, growth is revised upward by 0.7 percentage point to 7.3 percent for 2025, reflecting the better-than expected outturn in the third quarter of the year and strong momentum in the fourth quarter. Growth is projected to moderate to 6.4 percent in 2026 and 2027 as cyclical and temporary factors wane," IMF said.

IMF said inflation in India is expected to go back to near target levels (2-6 per cent) after a marked decline in 2025 driven by subdued food prices.

On the global economy, it said headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector.

- ANI

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Reader Comments

S
Sarah B
As an expat working here, the growth is palpable. The energy in cities like Bangalore and Hyderabad is incredible. However, I hope this economic success story also addresses the rural-urban divide more effectively.
P
Priya S
Good to see the numbers, but is the common person feeling this 6.4% growth? Vegetable prices are still pinching my pocket every month. The headline growth needs to match ground reality.
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Vikram M
Outpacing China's projected growth is a significant milestone. Our domestic demand story is strong. The focus on public investment is showing results. Jai Hind!
R
Rohit P
The mention of AI and tech investment as a tailwind is key. India's tech sector can be a massive engine for this growth if we get the skilling right. We need more IITs and IIITs!
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Michael C
From a global investor perspective, India remains the brightest spot. The consistent projections from the IMF add credibility. The moderation from 7.3% to 6.4% seems a healthy, sustainable correction.

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