Will India Continue to Outpace the World in Growth? IMF Says Yes!

At a time when the global economy is struggling with uncertainty, policy tensions, and inflationary pressures, India has emerged as a beacon of consistent growth and economic resilience. According to the April 2025 edition of the International Monetary Fund’s (IMF) World Economic Outlook (WEO), India is projected to maintain its status as the world’s fastest-growing major economy for at least the next two years.

The IMF estimates that India’s GDP will grow by 6.2% in 2025 and 6.3% in 2026. These projections, though slightly revised downward from the previous forecast in January 2025, still outshine every other major global economy.

Minor Revision, Major Momentum

The slight downward revision—down from earlier projections of around 6.5%—is attributed to rising global trade tensions, policy uncertainties, and uneven recovery across regions. Yet, the report underlines that India’s growth remains structurally intact. The country’s domestic demand, particularly in rural markets, remains firm and continues to support expansion, while policy stability and reforms provide a strong macroeconomic foundation.

"India continues to stand out for its stability and strength, even as the global economy adjusts to a phase of cautious stabilisation," the IMF noted in the report.

Global Growth Loses Steam

In contrast, the global economy paints a more subdued picture. The IMF has lowered the global GDP growth forecast to 2.8% for 2025 and 3.0% for 2026, reflecting lingering challenges such as:

• Geopolitical tensions,

• Slower-than-expected inflation reduction,

• Volatile financial markets, and

• Weakening international cooperation.

Inflation is also projected to cool down more slowly than expected, forcing central banks around the world to tread cautiously on interest rate cuts.

India Outshines Other Major Economies

India’s projected growth is significantly higher than that of other economic giants:

• China is now expected to grow at 4.0% in 2025, down from 4.6% in January.

• The United States faces a sharper slowdown, with GDP expected to rise by just 1.8%, a 90-basis-point cut from earlier projections.

• Eurozone economies continue to face near-stagnation conditions, further widening the growth gap between India and the developed world.

India’s growth trajectory is not just faster, but also more stable, indicating a robust economic engine powered by both consumption and investment.

What’s Fueling India’s Economic Engine?

According to the IMF, India’s consistent performance is underpinned by a combination of factors:

• Prudent fiscal and monetary policies that have helped manage inflation and sustain investment,

• Targeted capital expenditure on infrastructure, including roads, railways, and energy,

• Structural reforms such as digitalization, ease of doing business, and financial inclusion,

• A young and growing workforce that keeps domestic consumption vibrant, and

• Strong investor confidence, both domestic and foreign, especially in technology, manufacturing, and services.

India's Global Role is Expanding

India is not just growing—it is becoming a key player in shaping the global economic narrative. With developed economies slowing down and emerging markets facing high volatility, India’s stability offers a rare blend of growth and reliability. As the world adjusts to economic fragmentation and geopolitical realignments, India is increasingly being seen as a stabilizing force and an anchor of growth in Asia and beyond.

With two years of strong growth forecasts in hand, the Indian government and policymakers now have the opportunity to:

• Deepen economic reforms,

• Attract more foreign investment,

• Focus on inclusive growth, especially in Tier 2 and Tier 3 cities,

• And strengthen India’s position as a manufacturing and innovation hub.

The IMF's latest outlook not only reaffirms confidence in India's economic resilience but also highlights the country’s rising global importance in a world seeking new engines of growth.