Blitz Bureau
NEW DELHI: The International Monetary Fund’s decision to revise upwards its estimate of India’s GDP growth forecast – from 6.6 per cent to 7.3 per cent – in the current financial year offers a timely validation of the economy’s underlying momentum.
“In India, growth is revised upward by 0.7 percentage point to 7.3 per cent for 2025 (FY 2025-26), reflecting the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter,” the IMF said in its January 2026 update of the World Economic Outlook The new estimate places the Fund broadly in line with the Indian Government’s own projection of 7.4 per cent for the year, reinforcing the view that India remains the fastestgrowing major economy in a slowing global landscape.
Notable resilience
The global economy, said the IMF, has shown “notable resilience” despite significant US-led trade disruptions and heightened uncertainty, with growth projected to hold steady at 3.3 per cent in 2026.
In a blog published alongside its January 2026 World Economic Outlook Update, the IMF stated that global growth has remained broadly unchanged from a year earlier, as the world economy “shakes off the immediate impact of the tariff shock,” helped by easing trade tensions and strong technology-driven investment. Economists say that the revision for India reflects a confluence of factors rather than a single driver.
“What the IMF is acknowledging is that India’s growth impulse has been more broadbased than initially assumed,” said Pronab Sen, former Chief Statistician of India. “Public capital expenditure, resilient consumption in urban areas, and steady credit growth have together provided a cushion against global uncertainties,” he said. Soumya Kanti Ghosh, Group Chief Economic Adviser at State Bank of India, said, “Seven-plus per cent growth is impressive, but sustaining it is a different challenge altogether. The IMF’s mediumterm projection, he said, “reflects the reality that public investment cannot keep doing the heavy lifting indefinitely. The baton has to pass decisively to private capex and productivity-led growth.”
High-frequency indicators over recent months have pointed to robust activity in construction, manufacturing and services, supported by sustained Government spending on infrastructure and an improving private investment cycle. Capacity utilisation in several manufacturing segments has edged higher, while bank credit growth has remained in double digits, especially for industry and retail borrowers. According to a senior RBI official, the IMF’s assessment broadly aligns with the central bank’s internal outlook. “The disinflationary trend, particularly in food prices, has helped anchor expectations. This allows monetary policy to remain calibrated, supporting growth while remaining vigilant on risks,” the official said