International Monetary Fund (IMF) Says India Remains Resilient Despite Oil Shock, Projects 6.4% Growth

WASHINGTON: India’s economy remains resilient despite the headwinds of higher global oil prices triggered by the Middle East conflict, the International Monetary Fund (IMF) said as it marginally lowered the country’s 2026 growth forecast to 6.4 per cent while projecting stronger expansion next year as the energy shock eases.

The IMF, in its latest World Economic Outlook update released on Wednesday (local time), revised India’s growth forecast for 2026 down by 0.1 percentage point from its April projection but raised the 2027 forecast by 0.2 percentage point, saying stronger-than-expected economic activity and resilient domestic demand continue to underpin the country’s outlook.

Presenting its latest World Economic Outlook (WEO) Update, IMF officials said India had weathered the global uncertainty better than many economies, although higher energy prices linked to the conflict in the Middle East would weigh on growth this year.

“For India, we have the forecast for this year revised down very slightly by 0.1 percentage point to 6.4. And growth for next year, for 2027, revised upward by 0.2 percentage point,” IMF Research Department Division Chief Deniz Igan told reporters during a press briefing.

She said the revised outlook reflected two opposing forces.

“On the upside, we have the better-than-expected outturn in the most recent data. But we also have high-frequency indicators through April showing quite a bit of resilience in overall economic activity,” Igan said.

However, she said the positive momentum had been more than offset this year by rising energy costs.

“But these positive effects are then more than offset for 2026 by the higher energy prices we have in our baseline in the July Update, as well as the greater pass-through of those higher oil prices to prices at the pump in India,” she said.

The Fund expects those pressures to ease next year.

“Moving into 2027, we are expecting (India’s growth) strengthening with the energy shock dissipating and medium-term growth being estimated at around 6.5 per cent and output closing. We expect some pickup there,” Igan said. (IANS)

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