The International Monetary Fund (IMF) has increased India's Gross domestic product (GDP) growth forecast for the fiscal year 2025-26 (FY26) by 0.7 percentage point to 7.3 percent from its October projection. This upward revision is attributed to the better-than-expected outturn in the third quarter of the year and strong momentum in the fourth quarter.
In its World Economic Outlook (WEO), IMF has also revised India's growth projection to 6.4 per cent for the next fiscal year (FY27), from its earlier estimate of 6.2 per cent. It also expects growth to settle around 6.4 percent in FY28 as cyclical and temporary factors wane.
Talking on inflation, IMF said it is expected to go back to near target levels after a marked decline in 2025 driven by subdued food prices. The Reserve Bank has a target to maintain consumer price index (CPI) based headline inflation at 4 per cent, with a margin of 2 per cent on the either side.
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