On the inflation front, the IMF said that inflation has declined significantly in 2025 due to softening of food prices and is expected to return closer to the target in the future.

Amid trade wars and tariff tensions, good news arrives: America will be in trouble, and China will be worried.

IMF on India's GDP: In view of the strong performance of the Indian economy, the International Monetary Fund (IMF) has raised India's economic growth forecast for the financial year 2025-26 to 7.3 percent, which is 0.7 percentage points higher than the estimate released in October. This Washington-based multilateral institution said in its 'World Economic Outlook' report that this revision has been done due to better-than-expected performance in the third quarter and strong momentum in the fourth quarter. Also, the IMF has raised India's GDP growth forecast for the financial year 2026-27 to 6.4 percent, which was earlier 6.2 percent.

Strong performance despite tariffs

According to the IMF, however, India's growth rate may see some moderation in the coming years. Growth is projected to be 6.4 percent in fiscal years 2026-27 and 2027-28, as the impact of cyclical and temporary factors gradually diminishes. According to government data, India's GDP growth rate was 8 percent in the first half (April–September) of fiscal year 2025-26, compared to 8.2 percent in the July–September quarter.

According to the first advance estimate of the Ministry of Statistics, the Indian economy is expected to grow at 7.4 percent in the current financial year, while in the financial year 2024-25, this rate was 6.5 percent.

Relief on the inflation front

On the inflation front, the IMF stated that softening food prices led to a significant decline in inflation in 2025 and are expected to return closer to the target going forward. The Reserve Bank of India has a target of keeping retail inflation within 4 percent, with a margin of 2 percent. Regarding the global outlook, the IMF projects global economic growth to be 3.3 percent in 2026 and 3.2 percent in 2027, with emerging and developing economies expected to slightly exceed 4 percent.

China's growth forecast for 2025 has been raised by 0.2 percentage points to 5 percent, while global inflation is expected to decline from 4.1 percent in 2025 to 3.8 percent in 2026 and 3.4 percent in 2027.