New Delhi: India is poised to maintain its status as the fastest-growing major economy globally, with the International Monetary Fund (IMF) projecting a GDP growth rate of 6.5% for the fiscal year 2025-26. This forecast, bolstered by robust private investment and macroeconomic stability, highlights India’s economic resilience in the face of global uncertainties.
The IMF’s evaluation aligns with the Indian government’s second advance estimate, which also anticipates a GDP growth of 6.5% for 2024-25. According to the IMF’s statement, “Real GDP is expected to grow at 6.5% in 2024-25 and 2025-26, supported by robust growth in private consumption on the back of sustained macroeconomic and financial stability.”
While India’s growth trajectory remains strong, the IMF has underscored the necessity for comprehensive structural reforms to ensure long-term economic expansion. The report advocates for initiatives aimed at implementing labor market reforms, enhancing human capital, and promoting increased participation of women in the workforce.
The IMF also highlighted the importance of boosting private investment and foreign direct investment (FDI), emphasizing the need for stable policy frameworks, improved business conditions, and deeper trade integration through reductions in both tariff and non-tariff barriers.
Despite a slight moderation in growth, India’s economy has demonstrated resilience, achieving a year-on-year GDP growth of 6% in the first half of 2024-25. Inflation has remained within the Reserve Bank of India’s tolerance band of 2-6%, although fluctuations in food prices have introduced some volatility.
The International Monetary Fund (IMF) has emphasized the resilience of the financial sector, noting that non-performing loans are at their lowest levels in several years. Ongoing fiscal consolidation measures have been effective, and the current account deficit has remained well-managed, supported by strong service exports.
The IMF’s recent evaluation highlights the robustness of India’s economy while advocating for sustained reforms to ensure long-term growth and to realize its goal of becoming an advanced economy by 2047.
India’s real GDP growth surged to 6.2% in the third quarter of fiscal year 2025 (October-December 2024), an increase from 5.6% in the preceding quarter, driven by heightened consumer demand, as reported by the National Statistics Office (NSO) on February 27. In contrast, GDP growth was recorded at 9.5% in the third quarter of 2023-24.
For the entire fiscal year 2025, the second advance estimates project GDP growth at 6.5%, a slight increase from the 6.4% forecasted in the first advance estimates released in January.
