Strong economic momentum sets stage for IMF to lift India’s 2025-26 outlook

Former IMF Chief Economist Gita Gopinath , now a Harvard University professor, has indicated that the International Monetary Fund (IMF) is likely to revise India’s growth projection for 2025-26 upwards, following the country’s robust performance in the first two quarters of the current fiscal.

The IMF had initially forecast India’s growth at 6.5 per cent for 2025-26 and later revised it slightly to 6.6 per cent in October. However, India’s GDP growth surged to 8.2 per cent year-on-year in Q2 , a six-quarter high , surpassing both the IMF’s projection and the previous quarter’s 7.8 per cent growth.

According to Gopinath, several business and economic factors contributed to this outperformance. Strong domestic consumption remained a key driver, supported by increased household spending. The rationalisation of GST rates in September 2025 boosted demand in several sectors, while improvements in physical and digital infrastructure facilitated smoother business operations and investment flows. She noted that these structural developments, combined with ongoing reforms, are helping India exceed expectations.

In its recent review, the Reserve Bank of India (RBI) raised its full-year GDP growth forecast to 7.3 per cent , up by half a percentage point, reflecting the strong momentum in the economy.

Looking ahead, Gopinath highlighted the long-term goal of ‘Viksit Bharat’ by 2047, noting that sustaining around 8 per cent growth over the next two decades will be essential. “Maintaining such growth is challenging and requires continuous reforms every year,” she said.

On the international front, Gopinath discussed US tariffs , stating that the US is likely past the peak of tariff increases due to election-year considerations, inflationary pressures, and legal challenges. She stressed the importance of India and the US working together on mutually agreeable solutions to strengthen bilateral trade relations.

With India outperforming IMF projections and showing strong business-led growth, analysts expect the IMF to upgrade its growth outlook in its next report.