The International Monetary Fund (IMF) has revised India's growth projection to 6.5% for the financial year 2026-27, a 0.1 percentage point hike from the previous projection.
The upgrade is attributed to the decline in US tariffs on Indian goods, which is expected to offset the adverse impact of the ongoing West Asia conflict triggered by US-Israeli strikes in Iran.
However, the IMF has downgraded its forecast for global growth from 3.3% to 3.1% in 2026, warning that the Iran war has stalled the world's economic momentum this year.
The IMF also marked up its expectation for global inflation to 4.4% this year, citing the impact of the West Asia conflict on oil and gas prices.
The global economy had shown surprising resilience until the conflict, but the IMF forecast assumes that the West Asia conflict is a short-term occurrence.
However, the IMF highlighted a 'severe scenario' if the war drags out, saying global growth could drop to 2% in 2026 and 2027 if energy shocks spill into next year.
