New Delhi, July 8 (ANI): India remains among the world’s fastest-growing major economies, with gross domestic product (GDP) growth projected at 6.4% in fiscal year 2026-27, supported by strong momentum in private consumption and services activity, according to the International Monetary Fund’s (IMF) July 2026 World Economic Outlook (WEO) Update.
The IMF said India continues to maintain its leading position even as global economic growth is expected to slow.
According to the report, global growth is projected to slow to 3.0% in 2026 before recovering to 3.4% in 2027. Global trade volume growth is also expected to decelerate sharply from 5.0% in 2025 to 3.5% in 2026 before rebounding to 4.3% in 2027.
The IMF said these trends reflect earlier front-loading of trade activity, the effects of tariffs, and the gradual adjustment of trade links and production chains through trade diversion and rerouting.
Among emerging markets and developing economies, growth is projected to slow to 3.8% in 2026 before recovering to 4.5% in 2027.
China’s economy is expected to expand by 4.6% in 2026, reflecting higher oil prices and persistent structural headwinds. In contrast, Vietnam’s growth forecast has been revised upward to 7.5%, while Malaysia is projected to grow by 4.7%, supported by the global technology cycle.
“In the United States, growth is projected at 2.3% in 2026 and 2.2% in 2027, virtually unchanged from April,” the IMF said.
“Activity is supported by fiscal policy, accommodative financial conditions, and continued technology-related business investment and productivity strength, with only limited impact from the war given the country’s net energy exporter status,” the report added.
Meanwhile, economic growth in the euro area is projected at 0.9% in 2026, 0.2 percentage point lower than the IMF’s April forecast. The fund attributed the downgrade to weaker first-quarter momentum, higher energy prices, and subdued consumer confidence.
The United Kingdom’s economy is projected to grow by 1.0% in 2026, while Japan’s growth is forecast at 0.6%. South Korea’s economy is expected to expand by 2.6%, driven by strong semiconductor demand.
In the Middle East and Central Asia, growth is projected to slow sharply to 0.7% in 2026 before rebounding to 6.5% in 2027, following a prolonged closure of the Strait of Hormuz. Commodity-producing countries, including Iraq, Kuwait, and Qatar, are expected to experience sharp contractions in 2026, while Saudi Arabia’s economy is projected to grow by 1.7%. Iran’s growth forecast has been revised upward to negative 5.4%.
The IMF also said the global decline in inflation is expected to pause.
“Headline inflation is projected to rise from 4.1% in 2025 to 4.7% in 2026 before easing to 3.9% in 2027, with the increase for 2026 driven mainly by higher energy and food prices,” the report said.
Core inflation is expected to return to central bank targets only gradually. The IMF projects that inflation targets will be reached by mid-2027 in the United Kingdom, by the end of 2027 in Japan and the United States, and in 2028 in the euro area. Inflation in China is also expected to rise from current low levels. (ANI)
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