India to Remain World's Fastest-Growing Major Economy: IMF
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The International Monetary Fund (IMF) has predicted that India will continue to lead the world's major economies in growth, with projected rates of 6.4% in 2026-27 and 2027-28. This forecast comes in the IMF's latest World Economic Outlook (WEO) update, which also revised India's 2025-26 growth forecast to 7.3% following the National Statistics Office's first advance estimates. According to the report, India's growth is expected to moderate to 6.4% in the coming years as cyclical and temporary factors subside. The IMF also expects inflation in India to return to near-target levels after a decline in 2025, driven by subdued food prices. The IMF's latest projections for global economies show that growth will remain steady at 3.3% in 2025, with the US and China expected to grow at 2.1% and 5% in 2025, respectively. However, the report cautions that the world economy is not stable, citing risks such as an AI bubble, trade uncertainty, and geopolitical developments. The report warns that an AI bubble could lead to a sharp drop in investment and a prolonged correction in stock market valuations, which could have negative effects on private consumption and investment. The IMF also highlights the need for globally coordinated policies to boost medium-term growth. To promote global growth, the report suggests that measures such as fiscal consolidation, advancing China's reforms, and diversifying the sources of growth would be beneficial. These efforts would help to strengthen the global economy and mitigate the risks associated with emerging technologies like AI.
