India’s GDP growth for FY26 is expected to be lower at 6.2 percent compared with 6.5 percent, as predicted in January, citing the overhang of global uncertainty and trade tensions, the International Monetary Fund said on April 22.
In its second update of the World Economic Outlook, IMF said the escalating trade conflict may impact FY27 growth prospects as well, with India’s growth seen at 6.3 percent compared to 6.5 percent as projected earlier.
“For India, the growth outlook is relatively more stable at 6.2 percent 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,” the IMF said.
IMF’s revision follows similar downgrades from World Trade Organisation and UNCTAD earlier this month.
India’s central bank in its policy outlook in April too has revised the growth forecast down to 6.5 percent from 6.7 projected in February.
Goldman Sachs earlier this month had reduced India’s growth forecast down to 6.1 percent for FY26 from 6.3 percent projected earlier.
Indian economy is expected to do better on the price rise as consumer inflation is expected to decline to 4.2 percent in FY26 compared with 4.7 percent in FY25. For FY27, IMF has projected inflation to further cool down to 4.1 percent.
Global growth is expected to take a bigger hit this year, with the world economy at risk of slowing down to 2.4 percent growth in 2025 compared with 3.5 percent in 2024. The 2.4 percent forecast is 0.8 percentage points or 80 bps lower than the January projection of 3.2 percent growth.
US, which set off the trade war, could see growth erode by 0.9 percentage points to 1.5 percent, while China is also expected to witness a decline of 1.3 percentage points to 3.2 percent.
The IMF projection is based on the situation as of April 4, two days after US President Trump’s reciprocal tariffs, which, however, were paused on April 9 for all countries expect China.
China and the US since have announced additional levies, taking overall tariff rates to over 100 percent.
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