India's Economic Resilience: IMF Raises Growth Forecast to 6.6%, China at 4.8% Amid Tariff Challenges
The International Monetary Fund (IMF) has revised its economic outlook, predicting India's GDP to surge by 6.6% in the fiscal year 2025-26, surpassing China's projected 4.8% growth. This positive forecast, despite recent US tariff hikes on Indian goods, highlights India's economic resilience and robust domestic demand.
The IMF attributes India's strong performance to its ability to weather the tariff shock, crediting its domestic strength and policy agility. The report emphasizes that India's Q1 performance effectively countered the negative impact of US tariffs, demonstrating the country's economic prowess.
In contrast, China's growth is expected to be more modest, with the IMF attributing this to the country's slower pace of consumer spending and investment. India's diversified trade strategies, which have helped mitigate protectionist headwinds, further underscore its economic resilience.
However, the IMF also issued a cautious note, revising India's 2026 growth forecast to 6.2%. This adjustment reflects the potential easing of early momentum, prompting the Indian government to maintain its growth target range of 6.3-6.8% for the fiscal year 2025-26.
On a global scale, the IMF predicts a slowdown in economic growth, projecting a 3.2% expansion in 2025 and 3.1% in 2026. Advanced economies are expected to grow at a meager 1.6%, while emerging markets will average 4.2%. Spain and the US are among the leaders in developed nations, with growth rates of 2.9% and 1.9%, respectively.
The IMF report emphasizes the importance of governments taking proactive measures to rebuild fiscal buffers, safeguard central bank independence, and intensify structural reforms. It underscores that 'credible, transparent, and sustainable policy actions' are essential to navigate the ongoing global uncertainties and economic challenges.
