India is poised to remain the standout performer among major economies, maintaining its status as the fastest-growing large economy over the coming years, even as global expansion loses momentum, the International Monetary Fund (IMF) said in its January 2026 World Economic Outlook Update.
According to the IMF’s latest projections, India’s economy is set to grow by 7.3 per cent in 2025, before easing to a still-strong 6.4 per cent in both 2026 and 2027. The growth outlook places India well ahead of the global average and far above most advanced economies, underlining its growing importance as a pillar of global economic activity.
Worldwide growth, by comparison, is forecast to remain subdued. The IMF estimates global output will rise by 3.3 per cent in 2025 and 2026 before slowing marginally to 3.2 per cent in 2027, reflecting weaker momentum in several large economies amid policy uncertainty and structural challenges.
India’s resilience, the Fund noted, is being driven primarily by strong domestic consumption, continued government-led capital spending, and signs of a pickup in private investment. The IMF revised India’s 2025 growth estimate sharply upward, citing stronger-than-anticipated economic performance in the latter part of the year, which has carried forward positive momentum into the current outlook period.
When viewed alongside other major economies, India’s growth path remains distinctly stronger. The United States is projected to expand at 2.4 per cent in 2026, China at 4.5 per cent, and the Euro Area at just 1.3 per cent. Within Asia’s emerging and developing economies, India continues to outpace its peers and is expected to play a key role in supporting the region’s projected 5.0 per cent growth in 2026.
The IMF added that while emerging market and developing economies as a group are forecast to grow by 4.2 per cent in 2026, India’s pace will remain well above that average, highlighting the country’s relative economic strength.
On the inflation front, the Fund expects price pressures in India to stabilise near the central bank’s target range of 2 to 6 per cent. This follows a notable moderation in inflation during 2025, largely attributed to easing food prices.
