India world’s fastest-growing major economy: IMF upgrades 2025 & 2026 growth forecast to 6.4%; global growth lifted to 3.1% in 2026

The International Monetary Fund (IMF) has revised its forecast for India’s economic growth to 6.4% for both 2025 and 2026 — up from 6.2% and 6.3%, respectively, projected in its April 2025 World Economic Outlook — reaffirming India’s position as the world’s fastest-growing major economy. The IMF also modestly raised its global growth outlook to 3.0% in 2025 and 3.1% in 2026, citing lower-than-expected impact from tariffs, a weaker US dollar, and improved financial conditions.The updated World Economic Outlook (WEO), released Tuesday, noted that “growth in India is projected to be 6.4 percent in 2025 and 2026, with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast.”In comparison, China is forecast to grow at 4.8% in 2025 and 4.2% in 2026, while the US is expected to expand 1.9% in 2025 and 2.0% in 2026, with a temporary boost from the One Big Beautiful Bill Act fiscal package.While global growth remains below the pre-pandemic average of 3.7%, the IMF attributes the upward revision to “stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective US tariff rates than announced in April; an improvement in financial conditions, including due to a weaker US dollar; and fiscal expansion in some major jurisdictions.”The agency warned, however, that risks are still tilted to the downside. “A rebound in effective tariff rates could lead to weaker growth… Elevated uncertainty could start weighing more heavily on activity, also as deadlines for additional tariffs expire without progress on substantial, permanent agreements,” it said.On inflation, the IMF expects global headline inflation to fall to 4.2% in 2025 and 3.6% in 2026, with sharp variations across countries. “Inflation will remain above target in the United States and be more subdued in other large economies,” the report said.The report added that “global trade volume is revised upward by 0.9 percentage point for 2025 and downward by 0.6 percentage point for 2026”, indicating that recent gains from tariff front-loading may taper off.Among large emerging economies, India, China and Indonesia remain standout performers, with the IMF crediting India’s gains partly to external stability. For India, projections are based on the calendar year, with the agency noting that “India’s growth projections are 6.7 percent for 2025 and 6.4 percent for 2026 based on fiscal year data.”On the upside, the IMF said the global economy could gain further if “trade negotiations lead to a predictable framework and to a decline in tariffs. Policies need to bring confidence, predictability, and sustainability by calming tensions, preserving price and financial stability, restoring fiscal buffers, and implementing much-needed structural reforms.”