NEW DELHI, November 29, 2025: India’s economic growth remains among the strongest globally, with inflation contained and domestic demand sustaining expansion despite global uncertainties, the International Monetary Fund (IMF) said in its latest annual assessment released this week. According to the IMF’s 2025 Article IV Consultation report, India’s real gross domestic product is projected to grow by 6.6 percent in fiscal year 2025–26. The Fund noted that robust private consumption, steady public investment, and stable macroeconomic management continue to underpin economic performance.
The strong carry-over from the first quarter, when India’s GDP rose by 7.8 percent, is expected to support momentum across the fiscal year even amid a weaker global environment. The IMF said that India’s inflation remains under control, aided by easing food prices, supply-side measures, and prudent monetary policy. Headline inflation is forecast to stay within the Reserve Bank of India’s target range. Core inflation has also moderated, reflecting stable domestic demand conditions and improved supply dynamics. The Fund acknowledged that continued policy coordination between the government and the central bank has helped maintain price stability while supporting growth.
Public investment in infrastructure, ongoing fiscal consolidation, and reforms in the goods and services tax system were highlighted as contributing factors to the economy’s resilience. The IMF observed that India’s fiscal policy remains geared toward maintaining stability, with a focus on targeted capital expenditure to boost productivity and long-term growth capacity. It also noted that recent digital and financial inclusion initiatives have strengthened public service delivery and supported small and medium enterprises.
IMF notes India’s progress in fiscal management and reforms
While private investment has yet to reach pre-pandemic acceleration levels, the Fund stated that public investment and stable credit conditions have provided a strong base for recovery. The financial sector was described as sound, with well-capitalized banks, lower non-performing assets, and a steady expansion in credit to productive sectors. The IMF said these conditions support confidence in India’s medium-term outlook, provided that fiscal prudence and structural reforms continue.
The global environment, however, remains challenging. The IMF report noted that slower growth in major economies, tighter financial conditions, and trade restrictions could weigh on external demand. India’s large domestic market and diversified economic base, it said, continue to act as buffers against global volatility. The Fund underscored the importance of preserving fiscal space to manage potential shocks and sustaining reforms to improve competitiveness, labor productivity, and investment climate.
IMF underscores India’s role in global economic stability
The IMF also stated that India’s goal of achieving a US $5 trillion economy will likely be realized slightly later than earlier expected, reflecting nominal growth trends and currency factors. Nevertheless, the country’s economic fundamentals remain strong, supported by a broad policy framework and steady progress in public investment, manufacturing, and services. Overall, the IMF’s review characterized India as a key driver of global growth, maintaining one of the highest expansion rates among major economies.
The Fund said that continued macroeconomic stability, disciplined fiscal policy, and a predictable regulatory environment have kept investor confidence high, particularly among long-term institutional investors and global financial markets. It added that vigilance against external pressures and sustained reform momentum will remain essential for India to consolidate its growth trajectory and preserve its role as a leading contributor to global economic stability and regional financial resilience. – By Content Syndication Services.