IMF Lowered India’s GDP Forecast to 6.2% for FY26; 6.3% for FY27

Current Context: The International Monetary Fund (IMF) published its updated World Economic Outlook report on April 22, 2025, revising India's GDP growth projections for the upcoming fiscal years. 

Revised GDP Growth Forecasts:

• FY26: Forecast lowered from 6.5% to 6.2%.
• FY27: Forecast reduced from 6.5% to 6.3%.

Key Reasons for the Downgrade:

• Global Trade Tensions: Ongoing trade disputes and uncertainties among major economies, such as the U.S. and China, are impacting global trade and economic stability.
• Slower Global Demand: The world economy is witnessing a moderation in demand due to inflationary pressures and cautious spending.
• Financial Market Volatility: Unstable financial markets, including fluctuating interest rates, are contributing to a conservative outlook.

India's Resilience:

• Despite the downgrade, India’s GDP growth remains relatively strong compared to other economies.
• Private consumption and rural economic recovery are expected to support India's growth trajectory.

Inflation Outlook:

• Inflation rates are projected to ease to 4.2% in FY26 and 4.1% in FY27, promoting price stability and encouraging investments.

Question:

Q.1 According to the International Monetary Fund (IMF) April 2025 World Economic Outlook, what is the revised GDP growth forecast for India for FY26?
a) 6.2%
b) 6.0%
c) 6.5%
d) 6.3%

Answer: a) The IMF lowered India's FY26 GDP growth forecast from 6.5% to 6.2%, citing global economic concerns.