The International Monetary Fund (IMF) raised its this Monday growth forecast for India for the 2025-26 financial year, citing stronger-than-expected momentum in recent quarters, though signaling a moderation in the coming years once cyclical tailwinds fade.

In its latest forecast, the global agency revised India’s GDP growth estimate for FY26 up by 0.7 percentage points to 7.3%, reflecting a better-than-expected performance in the third quarter and sustained strength heading into the fourth.

The Fund, however, expects this pace to cool down in the medium term. Growth is expected to slow to 6.4% in 2026 and 2027 as temporary and cyclical factors supporting the economy begin to wane.

The update follows a reassessment earlier this month by the Office for National Statistics, which raised its growth estimate for the year ending March 31 to 7.4%, up from the government’s initial projection range of 6.3% to 6.8%.

In its previous report, the IMF had projected growth of 6.6% for FY26, driven largely by domestic consumption. Stronger than expected economic activity in the third quarter altered this assessment.

The IMF’s revised outlook is broadly in line with other multilateral assessments. The World Bank earlier this month raised its FY26 growth forecast for India to 7.2%, pointing to resilient domestic demand despite higher US tariffs.

The World Bank earlier this month raised its FY26 growth forecast for India to 7.2%, pointing to resilient domestic demand despite higher US tariffs.