IMF cuts India's growth forecast to 6.2% in FY26 amid tariff uncertainty
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The International Monetary Fund (IMF) on Tuesday revised India's economic growth forecast for FY26 downwards to 6.2% from 6.5% earlier, citing the impact of trade tensions and global uncertainty triggered by the United States' imposition of tariffs.For FY27, the gross domestic product (GDP) growth projection has also been reduced to 6.3% from 6.5%.However, based on IMF projections, India's economic growth forecast is set to be the highest among emerging and advanced economies.The US has imposed a 26% tariff on imports from India.India's growth outlook for 2025 remains "relatively more stable", buoyed by consumption, especially in rural areas, according to the World Economic Outlook.In comparison, China's GDP growth forecast for 2025 has been downgraded to 4% from 4.6%. For the US, growth is projected to slow to 1.8% from 2.7% forecasted in the January 2025 WEO update.The IMF noted that countries directly impacted by new tariffs, particularly China and the US, would be the most affected. However, countries in Asia and Europe will also feel the impact in the medium term.The IMF now projects global GDP growth of 2.8% in 2025, a downward revision from the earlier forecast of 3.3%.Tariffs would also impact inflation India's inflation is expected to fall to 4.2% in FY26 and further to 4.1% in FY27.
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