India to stay fastest-growing economy with 6.5% GDP in FY26, but reforms key for future momentum: IMF

India is set to maintain its position as the fastest growing economy in the world, with the projected growth rate of 2025-26, according to the International Monetary Fund (IMF). Prediction for highly private investment and macroeconomic stability covers India’s economic flexibility, despite global uncertainty.

The IMF assessment is followed by the Second Estimate of the Government of India, which also increased the GDP growth for 6.5% 2024-25. “Real GDP is expected to grow by 6.5% 2024-25 and 2025-26, with a steady increase in private consumption of macroeconomic and financial stability,” the IMF said.

Before the growth of India, the IMF stressed the need for comprehensive structural reforms to maintain long-term expansion. “The efforts to strengthen the workforce and strengthen the labor force should focus on the implementation of labor market reforms, strengthening human capital and the great participation of women in labor.”

Promoting private investment and foreign direct investment (FDI) will be critical, said the IMF calling for stable policy and easily improved business improvements through business management and non-tariff reduction.

Despite the growth of growth, the Indian economy remains resistant, and in the first half of 2024-25, 6% of GDP was registered. Inflation has released on India’s tolerance tape (2-6%), although the variations of food products have caused instability.

The financial sphere, the IMF emphasizes, remains a strong, long-working low-life loans. Tax consolidation efforts continued, and the current account deficit remained well-contained, supporting strong service exports.

The latest assessment of the IMF highlights India’s economic power, at the same time, has urged continuous reforms to ensure long-term prosperity and becoming a leading economy in 2047.

India’s real GDP growth by December 2024 (Q3 FY25) speeds up 6.2% (Q3 FY25).

The second prepayment for the full fiscal year of FY25 assesses PEG GDP growth by 6.5%, designed by the first preliminary estimates of January.