IMF Raises India’s 2025 Growth Forecast Despite Trump Tariffs

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WASHINGTON– The International Monetary Fund has raised India’s growth forecast to 6.6 percent for 2025, an increase of 0.2 percentage points from its previous estimate, citing the country’s strong economic performance in the first quarter that helped offset the impact of new U.S. tariffs.

“In India, growth is projected to be 6.6 percent in 2025,” the IMF said in its latest Global Economic Outlook released Tuesday in Washington. “Compared with the July WEO update, this is an upward revision for 2025, with carryover from a strong first quarter more than offsetting the increase in the U.S. effective tariff rate on imports from India since July.”

The IMF expects India’s growth to ease slightly to 6.2 percent in 2026, down 0.2 percentage points from its previous projection. The revision follows India’s better-than-expected 7.8 percent growth in the April–July quarter, which outpaced forecasts and underscored its resilience amid global trade headwinds.

On Monday, IMF Managing Director Kristalina Georgieva praised India’s economic progress, calling its growth trajectory “impressive.” She credited the government’s structural and fiscal reforms for fostering digital inclusion and modernization.

“I’m very big on India because of the boldness with which they do things that others are telling them not possible,” Georgieva said. “For example, digital identity. Everybody was saying you cannot have everybody with a digital ID — they have proven them wrong.”

The World Bank last week also revised its 2025 growth forecast for India upward, from 6.3 percent to 6.5 percent, citing robust domestic demand and investment momentum.

Globally, the IMF projects the world economy will expand by 3.2 percent this year, with the overall effects of the Trump administration’s tariffs proving less severe than initially expected.

“With many trade deals and exemptions, most countries also refrained from retaliation, keeping the trading system open, and the private sector proved agile, front-loading imports and rerouting supply chains,” IMF Chief Economist Pierre-Olivier Gourinchas said Tuesday.

Still, Gourinchas cautioned that “the tariff shock is here” and is weighing on already fragile global growth prospects — including in the United States.

“Even in the U.S., growth is revised down from last year. The labor market is weakening and inflation has been revised up and is persistently above target, signs that the economy has been hit by a negative supply shock,” he said.

The IMF marginally raised its 2025 projection for U.S. economic growth from 1.9 percent to 2 percent. (Source: IANS)

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