IMF lowers FY25 GDP growth forecast for India to 6.5 pc, retains estimate for FY26 and FY27

New Delhi, Jan 18 (Mayank Nigam) The International Monetary Fund (IMF) on Friday lowered India’s gross domestic product (GDP) growth forecast for financial year 2024-25 or FY25 to 6.5% from 7% estimated earlier. In its January 2025 edition of the World Economic Outlook (WEO) Update released today, the multilateral agency kept the GDP growth forecast for FY26 and FY27 at 6.5%. The IMF noted that growth in India during the current fiscal has slowed more than expected, led by a sharper-than-expected deceleration in industrial activity. “In India, growth is projected to be solid at 6.5 percent in 2025 (FY26) and 2026 (FY27), as projected in October and in line with potential,” the IMF said.

The National Statistics Office (NSO) in its First Advance Estimate has pegged India’s GDP growth for FY25 at 6.4%, the lowest annual growth in the last four years. At 5.4%, India’s GDP growth rate slowed down to seven-quarter low in the July-September quarter (Q2) of the current financial year. The Q2 print was much below the expectations of economists, policy-makers and market-watchers. The dip in growth rate has led to downward revision in the GDP growth for the current fiscal. Meanwhile, the IMF in its January 2025 World Economic Outlook Update has pegged global growth at 3.3% in 2025 and 2026. “Global growth will likely remain steady at 3.3% this year and next, but with divergences between countries. Inflation is declining, with global rates expected to fall to 4.2% this year and 3.5% in 2026, nearing central bank targets,” it said.