Source : INDIA TODAY NEWS
India is expected to remain one of the fastest-growing major economies, even though the International Monetary Fund (IMF) has slightly lowered its growth forecast for the current financial year. The global lender says strong consumer spending and the services sector will continue to support the country’s economy despite global challenges.
IMF LOWERS FY27 GROWTH FORECAST, RAISES FY28 OUTLOOK
In its July 2026 World Economic Outlook (WEO) Update, the IMF projected India’s economy to grow by 6.4% in FY2026-27, slightly lower than the 6.5% forecast made in April.
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At the same time, it raised its growth estimate for FY2027-28 to 6.7%, up from the earlier projection of 6.5%.
The IMF said India continues to be one of the fastest-growing major economies.
“India remains among the fastest-growing major economies, with growth projected at 6.4 per cent, supported by strong momentum in private consumption and services activity,” the report said.
GLOBAL GROWTH EXPECTED TO SLOW IN 2026
The IMF expects global economic growth to slow to 3.0% in 2026, compared with an average of 3.5% during 2024 and 2025. It expects global growth to improve to 3.4% in 2027.
According to the report, the slowdown is mainly due to the impact of the war in the Middle East. However, stronger demand linked to advances in artificial intelligence (AI) and its growing adoption is expected to partly offset the impact.
The IMF said the overall global growth outlook remains broadly unchanged from its April forecast, but the performance of individual countries is becoming more uneven.
It noted that countries outside the conflict zone that export energy are benefiting from higher energy prices. Economies that are closely linked to the technology sector are also seeing stronger growth, even if they import energy. On the other hand, energy-importing countries with limited participation in the technology value chain, including many low-income nations, are expected to face weaker growth.
DOMESTIC DEMAND TO SUPPORT INDIA’S ECONOMY
For India, the IMF said domestic demand will continue to be the main driver of growth.
It expects strong household consumption and steady services activity to support the economy, even as the global environment remains challenging because of higher commodity prices, geopolitical tensions and slower global trade.
RBI PROJECTS 6.6% GROWTH FOR FY27
According to government data, India’s economy grew 7.7% in 2025-26, up from 7.1% in the previous year. GDP expanded 7.8% in the January-March quarter of FY26, compared with 8% in the previous quarter.
In its June Monetary Policy Committee meeting, led by Governor Sanjay Malhotra, the Reserve Bank of India reduced its FY27 GDP growth forecast to 6.6% from 6.9%.
The RBI cited rising risks from the ongoing West Asia conflict, higher energy prices, supply disruptions and weather-related uncertainties.
The central bank expects GDP growth of 6.6% in the first quarter of FY27, 6.3% in the second quarter, 6.5% in the third quarter and 6.8% in the fourth quarter.
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SOURCE :- TIMES OF INDIA
