International Monetary Fund's Revised GDP Growth Estimates

India's GDP Growth

• The IMF has revised its estimate of India’s GDP growth for the financial year 2025-26 to 7.3%, up from an earlier prediction of 6.6%.
• This revision is based on stronger-than-expected growth in the third quarter and strong momentum in the fourth quarter.
• The updated growth rate is slightly below the Indian government's projection of 7.4% for the same period.
• Growth is expected to moderate to 6.4% for 2026 and 2027 as temporary factors subside.

Global Economic Projections

• The global economy is projected to grow at 3.3% in calendar year 2026 and 3.2% in 2027.
• This represents a small upward revision for 2026, with no change for 2027 compared to the October 2025 World Economic Outlook.
• The steady global performance is attributed to a balance of divergent forces:
  • Headwinds from shifting trade policies. 
  • Tailwinds from investments in technology, particularly artificial intelligence, primarily in North America and Asia. 
  • Fiscal and monetary support, accommodative financial conditions, and private sector adaptability.

Inflation in India

• Inflation in India is expected to return to near-target levels following a decline in 2025 due to subdued food prices.
• The Reserve Bank of India aims for an inflation target of 4%.