India 7%, China 4.5%: IMF widens growth gap

The International Monetary Fund (IMF) has raised India’s growth forecast to 7 per cent in 2026-27, higher than the 6.4 per cent in July, on the back of resilient domestic demand and robust services activity, placing the country among the fastest-growing major economies.

“India remains among the fastest-growing major economies, with growth in 2026 projected at 7.0 per cent,” the IMF said in the World Economic Outlook (WEO) report released at its annual meeting in Bangkok.

“This reflects stronger-than-expected momentum, supported by resilient domestic demand and robust services activity,” the report said. It said India is projected to grow at 7 per cent in 2027-28, up from the July estimate of 6.7 per cent. China, the world’s second-largest economy, is expected to expand 4.5 per cent this year, down from 5 per cent in 2025.

The IMF slightly upgraded its outlook for the world economy for this year, but is still forecasting growth at a sluggish 3.1 per cent. The IMF had forecast global growth at 3.0 per cent in July. The world economy expanded at a 3.5 per cent annual pace in 2025. The IMF Economic Outlook predicts that growth in the United States will remain steady at 2.3 per cent in 2026 and 2027.

It said it now expects oil prices to rise nearly 41 per cent this year, to an average of $96 a barrel, boosting global inflation to 4.7 per cent in 2026 from 4.1 per cent last year.

Developing economies and emerging markets more vulnerable to higher oil and gas costs will see growth slow to 3.7 per cent this year from 4.5 per cent in 2025, before recovering to 4.4 per cent next year.