India to Retain Title as Fastest-Growing Major Economy with 6.5% Growth: IMF

India’s economic growth: India is poised to retain its position as the fastest-growing major global economy, with an anticipated growth rate of 6.5% in the fiscal year 2025-26, according to the International Monetary Fund (IMF). This growth is expected to be driven by sustained private investment and a stable macroeconomic environment.

The IMF’s positive outlook on India reflects its strong economic fundamentals, offering the country an opportunity to make notable strides in advancing structural reforms that are essential for achieving the ambitious goal of becoming an advanced economy by 2047. The IMF’s forecast also predicts that India will maintain its growth momentum in 2024-25 with a similar 6.5% growth, supported by steady private consumption and overall financial stability.

The IMF’s report also highlights the importance of implementing deeper structural reforms to stimulate private sector investment and job creation, which are vital for sustaining long-term growth. It stressed the need for policy reforms in areas such as labor markets, human capital development, and boosting women’s participation in the workforce.

The financial sector’s resilience, along with a decline in inflation and continued fiscal consolidation, is contributing to country’s economic strength. India has also benefited from a healthy current account deficit and strong performance in service exports, all of which contribute to its stable economic position. 

However, the IMF has urged for the reduction of trade barriers, both tariff and non-tariff, and stressed the importance of improving the ease of doing business and governance standards to attract more foreign direct investment (FDI).

India’s growth trajectory, while strong, is contingent on deeper reforms that will enable the country to meet its long-term objectives. The IMF’s report suggests that with the right mix of policies and reforms, India can capitalise on its current economic momentum and push forward on the path to becoming a developed nation in the coming decades.