The International Monetary Fund has upgraded its outlook for India, calling the country one of the fastest-growing major economies even as a war in the Middle East and elevated oil prices weigh on much of the world. In its October 2026 World Economic Outlook, released on Tuesday, 13 October, the Fund now projects Indian growth of 7.0 percent in both 2026 and 2027 on a fiscal-year basis. That is 0.6 percentage points higher than its July estimate for 2026 and 0.3 points higher for 2027. On a calendar-year basis, the IMF sees growth of 7.4 percent this year and 7.0 percent next year.
The Fund credited stronger-than-expected momentum, resilient domestic demand and robust activity in the services sector. It also noted that the artificial intelligence boom has helped support economic activity across Asia, with India and China emerging as major drivers of growth. IMF economic counsellor Silvana Tenreyro described Asia as remarkably resilient, even though most of its economies import energy and other commodities.
The picture for the rest of the world is more subdued. Global growth is projected at 3.1 percent in 2026 and 3.4 percent in 2027, broadly unchanged from April despite a more persistent energy market disruption than the Fund had expected. China is forecast to slow to 4.5 percent this year and 4.0 percent next year, while the United States is expected to grow 2.3 percent in both years.
India is not without risks. The IMF expects the current account deficit to widen to 1.5 percent of GDP in 2026 and 1.3 percent in 2027, compared with 0.7 percent in 2025, reflecting the cost of imported energy. Oil price volatility and wider geopolitical uncertainty could still weigh on demand and growth. Even so, the upgrade is a notable endorsement of the country’s economic resilience.