IMF cuts India’s growth forecast for FY26 to 6.2%

In the financial year 2026-27 India’s gross domestic product (GDP) is projected to expand by 6.3%, as per the IMF’s latest World Economic Outlook report. In its January report, the IMF had pegged India’s 2025-26 GDP growth at 6.5%.

New Delhi: The International Monetary Fund (IMF) on Tuesday revised down its projection for India’s economic growth in the current financial year to 6.2 per cent from its earlier estimate of 6.5 per cent, citing global uncertainties and trade tensions.

In the financial year 2026-27 India’s gross domestic product (GDP) is projected to expand by 6.3 per cent, as per the IMF’s latest World Economic Outlook report. In its January report, the IMF had pegged India’s 2025-26 GDP growth at 6.5 per cent.  

“For India, the growth outlook is relatively more stable at 6.2 per cent in 2025, supported by private consumption, particularly in rural areas, but this rate is 0.3 percentage point lower than that in the January 2025 WEO Update on account of higher levels of trade tensions and global uncertainty,” IMF noted in its report. Here 2025 means financial year 2025-26 (FY26). 

The IMF’s projection is lower than the Reserve Bank of India’s estimate of 6.5 per cent. In its monetary policy review earlier this month the RBI cut its India FY26 growth projection to 6.5 per cent from 6.7 per cent. The Economic Survey has pegged FY26 growth in the range of 6.3 to 6.8 per cent.

On Tuesday, the IMF cut its global growth forecast by 50 basis points to 2.8 per cent for the 2025 calendar year. The IMF has cut the US economy growth projection by a full percentage point to 1.8 per cent while China’s growth forecast has been lowered to 4 per cent from January’s projection of 4.6 per cent.

The multilateral lender noted that a sharp increase in tariffs announced by US President Donald Trump on April 2 “will lead to a significant slowdown in global growth in the near term.”

“While many of the scheduled tariff increases are on hold for now, the combination of measures and countermeasures has hiked US and global tariff rates to centennial highs… the global economy is now characterised by a high degree of economic and financial integration, with supply chains and financial flows crisscrossing the world, whose potential unwinding could constitute a major source of economic upheaval,” it said.

“At this juncture, while the situation remains fluid, risks remain firmly tilted to the downside. The global economy showed surprising resilience during the severe shocks of the past four years and still bears significant scars. It is now being severely tested once again, especially in emerging markets and developing economies with more limited buffers,” the IMF added.

AI economic gains likely to outweigh emissions cost:IMF Reuters: Economic gains from artificial intelligence will boost global output by around 0.5 per cent a year between 2025 and 2030 outweighing the costs of rising carbon emissions by the data centres needed to run AI models the International Monetary Fund said on Tuesday. An IMF report released at its annual spring meeting in Washington nonetheless noted that those output gains would not be shared equally across the world and called on policymakers and businesses to minimise costs to broader society. "Despite challenges related to higher electricity prices and greenhouse gas emissions the gains to global GDP from AI arelikely to outweigh the cost of the additional emissions" it said.