New Delhi: India’s economy is expected to grow at a robust 6.6 per cent in FY26, up from 6.5 per cent in FY25, driven by strong second-quarter performance and the rollout of GST 2.0 reforms, according to the International Monetary Fund (IMF) in its latest Regional Economic Outlook for Asia released on Friday.
The IMF said India’s growth outlook has improved since its April 2025 projection, with solid Q2 momentum and tax reforms expected to offset the negative impact of higher US tariffs on Indian exports. However, growth is projected to ease to 6.2 per cent in 2026.
“Asia-Pacific economies remained resilient through 2025, posting stronger-than-expected growth despite global challenges. Yet, rising US tariffs and protectionist measures are likely to dampen Asian export demand and weigh on near-term growth,” the IMF said.
China’s growth, meanwhile, is expected to slow to 4.8 per cent in 2025 from 5.0 per cent in 2024.
The IMF highlighted that India will continue to lead among major emerging economies, expanding at 6.6 per cent, the fastest rate in the group.
The report also urged policymakers to focus on enhancing regional integration by reducing trade and investment barriers, improving productivity, and strengthening financial intermediation. It further recommended measures to support the services sector, address aging populations, and upgrade policy frameworks to ensure sustainable and shock-resilient growth.
Overall, the IMF expects Asia’s economy to expand 4.5 per cent in 2025, marginally down from 4.6 per cent in 2024, but 0.6 percentage points higher than its April estimate, aided by strong exports and front-loaded shipments ahead of higher US tariffs.
Asia is projected to remain the engine of global growth, contributing about 60 per cent of the world’s expansion in 2025 and 2026. Inflation is expected to remain moderate across most emerging markets in 2025 and align more closely with central bank targets by 2026, the IMF added.
