India is poised to remain the fastest-growing major economy globally, with the International Monetary Fund (IMF) projecting a GDP growth rate of 6.5% for 2025-26. This optimistic outlook is fueled by robust private investments and macroeconomic stability, highlighting India’s economic resilience amid global uncertainties.
The IMF’s forecast aligns with the Indian government’s second preliminary estimate, which also pegs GDP growth at 6.5% for 2024-25. In a statement, the IMF noted, “Real GDP is expected to grow by 6.5% in 2024-25 and 2025-26, driven by strong private consumption growth supported by sustained macroeconomic and financial stability.”
While India’s growth momentum remains robust, the IMF underscored the need for comprehensive structural reforms to ensure long-term expansion. The report emphasized, “Efforts should focus on implementing labor market reforms, strengthening human capital, and increasing women’s participation in the workforce.”
The IMF also stressed the importance of boosting private investments and foreign direct investments (FDI). It called for a stable political framework, improved ease of doing business, and deeper economic integration through reduced tariff and non-tariff barriers.
Despite some moderation in growth, the Indian economy has shown resilience, with GDP increasing by 6% year-on-year in the first half of 2024-25. Inflation has remained within the Reserve Bank of India’s target range of 2-6%, although food prices have caused some volatility.
The financial sector remains strong, with non-performing loans at multi-year lows. Fiscal consolidation efforts have continued, and the current account deficit has stayed well-contained, supported by robust service exports.
The IMF’s latest assessment underscores India’s economic strength while urging sustained reforms to ensure long-term prosperity and achieve its ambition of becoming an advanced economy by 2047.
According to quarterly GDP estimates released by the National Statistical Office on February 27, India’s real GDP growth accelerated to 6.2% in October-December 2024 (Q3 FY25), up from 5.6% in the previous quarter (Q2 FY25), driven by rising consumer demand. For the full fiscal year FY25, the second advance estimate pegs GDP growth at 6.5%, slightly higher than the 6.4% projected in the first advance estimate in January.
