The International Monetary Fund (IMF) has revised India’s GDP growth forecast for FY27 to 6.4%, down from its earlier estimate of 6.6%, citing rising global energy prices and increased geopolitical uncertainty.
The IMF said higher crude oil prices are expected to raise import costs and inflationary pressures, posing challenges for Asia’s third-largest economy. Slower global trade and persistent geopolitical tensions are also likely to weigh on economic activity and investor sentiment.
Despite the downgrade, India is expected to remain the world’s fastest-growing major economy, supported by strong domestic demand, government-led infrastructure spending and resilient private consumption. The IMF said these factors continue to provide a strong cushion against global headwinds.
The multilateral lender maintained its FY28 growth forecast at 6.2%, indicating confidence in India’s medium-term growth prospects. It also expects inflation to remain manageable if commodity prices stabilise and supply-side conditions improve.
The IMF noted that India’s structural strengths, including a growing manufacturing base, rising digital adoption and sustained investment, should help the economy navigate external risks. However, it cautioned that any prolonged rise in energy prices or further escalation in global conflicts could affect growth, inflation and external balances.
The revised forecast comes at a time when policymakers are closely monitoring global developments and their impact on domestic economic activity. While the outlook has turned slightly more cautious, the IMF’s assessment underscores India’s relative resilience compared with other major economies facing slower growth and persistent global uncertainty.
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