India will grow faster than any other major economy in 2026, according to the International Monetary Fund. The Fund raised its projection for the country in its October 2026 World Economic Outlook, released on October 13 at its annual meetings in Bangkok.
The IMF now expects India’s economy to grow 7.0 per cent in both 2026 and 2027 on a fiscal-year basis. The 2026 figure is 0.6 percentage points higher than the 6.4 per cent it projected in July and 0.5 points higher than its April estimate. The 2027 projection also rose, by 0.3 points from July. On a calendar-year basis, the Fund puts Indian growth at 7.4 per cent in 2026 and 7.0 per cent in 2027.
The upgrade stands out against a weaker global picture. The IMF expects world growth to slow to 3.1 per cent in 2026 from 3.5 per cent in 2025, before recovering to 3.4 per cent in 2027. Global headline inflation is projected to climb to 4.7 per cent this year and ease to 4.1 per cent next year. The Fund describes an economy that has proven resilient so far but faces rising inflation and narrowing policy buffers. It says the risks are tilted to the downside.
The world’s two largest economies sit well below India this year. The United States is forecast to grow 2.3 per cent in 2026. China is expected to slow to 4.5 per cent this year and 4.0 per cent in 2027. The IMF trimmed both Chinese figures, blaming higher energy prices from the Middle East conflict and a slump in domestic spending. That leaves India 2.5 percentage points ahead of China this year, and the gap widens to 3 points in 2027. Japan is projected to grow 0.7 per cent in both years.
The sharpest swing in the report belongs to Saudi Arabia. The Kingdom’s economy is projected to shrink 3.3 per cent in 2026, after expanding 4.6 per cent in 2025, as the Middle East conflict and the prolonged closure of key shipping routes take their toll. The IMF then expects a rebound to 7.9 per cent growth in 2027, which would put Riyadh just ahead of India next year. That 2027 figure was raised by 2.4 percentage points from the July update.
The Fund said India stands out with upward revisions and cited stronger-than-expected momentum, resilient domestic demand and robust services activity. AI-related investment was also named as a driver. The revision follows official data showing the economy grew 7.8 per cent in the April-June quarter, above the Reserve Bank of India’s estimate of 7 per cent. The IMF also says India grew 7.8 per cent in fiscal 2025-26.
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