IMF projects 6.5% growth for 2026
India’s economic growth is expected to remain resilient despite global uncertainty triggered by the Middle East conflict, Pierre-Olivier Gourinchas said on Tuesday.
Speaking in a media interaction, Gourinchas noted that India has maintained strong economic momentum in 2025. “India has been doing very, very well in 2025,” he said, adding that growth is estimated at “7.6 per cent” for the fiscal year.
He said the momentum is expected to continue, with the International Monetary Fund projecting growth of “6.5” per cent in 2026, describing it as a “very slight upgrade” from earlier forecasts.
Resilience despite global headwinds
The outlook comes amid rising global uncertainty linked to the conflict in the Middle East, which has driven up energy prices.
“There is an effect of the war in the Middle East that is weighing down, but it’s more than offset by the momentum coming from 2025,” Gourinchas said.
He also pointed to easing trade tensions between India and the United States as a positive factor. “Trade discussions between the US and India have reduced the uncertainty around the tariff… and reduced the level of the tariff,” he added.
Inflation risks persist
The IMF expects inflation in India to rise moderately. “We are seeing an increase in inflation for 2026 to 4.7 per cent,” Gourinchas said, citing higher global energy prices and food costs.
“We’ve seen food prices that have been picking up in the early 2026 in India,” he noted.
Energy dependence remains a concern
While near-term growth remains stable, Gourinchas flagged India’s reliance on energy imports as a potential vulnerability.
“It’s very energy dependent… it’s very oil dependent as well,” he said, adding that this could create “some headwinds going forward.”
At the same time, he said India’s growth remains aligned with its long-term potential. “We have kind of a potential growth level that is around 6.5 per cent,” he said.
