India’s Economic Growth Projections 2025 & 26

Why in News?

Recently, the IMF forecasted India's growth at 6.4% for fiscal years 2025 and 2026, driven by reforms, strong consumption, and public investment.

The International Monetary Fund is an organization that works to foster global monetary cooperation, secure financial stability, promote sustainable economic growth, and reduce poverty around the world.

• India's growth projections – 6.7 % for 2025 & 6.4 % for 2026 (India’s growth rate was 6.5 % in 2024).
• Driving factors – Robust consumption growth and reforms in momentum and a push for public investment.
• Priority sectors – Fostering job creation,
  • Absorbing excess labour from the agricultural sectors by reskilling labour,
  • Allowing more labour market flexibility,
  • Continuing to invest in infrastructure,
  • Removing trade restrictions.
• Measures needed –Invest in education, Land reforms, Expand social safety nets, and reduce red tape to allow businesses perform better.
• IMF’s Global forecasts – Emerging market and developing economies, growth is expected to be 4.1 % in 2025 and 4.0 % in 2026.
  • For China growth is revised upward by 0.8 % to 4.8 % in 2025 showcasing significant reduction in US-China tariffs.
  • Global growth – Projected at 3 % for 2025 and 3.1 % in 2026.
  • Growth in advanced economies – Growth to be 1.5 % in 2025 and 1.6 % in 2026.
  • In the United States, expand at the rate of 1.9 % in 2025, with tariff rates settling at lower levels than those announced and looser financial conditions.
  • Growth is to pick up slightly to 2.0 % in 2026 with some offset from private demand cooling faster than expected and weaker immigration.

Reference

The Economic Times| Indian Economic Growth Projections 2025 & 26