The International Monetary Fund (IMF) has marginally raised India's growth forecast for financial year 2026-27 to 6.5%, despite the global headwinds arising out of the ongoing war in the Middle East.
The fresh projection, issued in the latest World Economic Outlook/Global Financial Stability Report, marks a revision of 0.1 percentage point, as compared to the previous forecast issued by the global financial body in January.
The upgrade suggests that India remains one of the stronger large economies despite external shocks. The IMF's latest outlook comes at a time when oil prices, shipping costs and inflation expectations have all been affected by the war in the Middle East. The fund said such tensions are likely to put upward pressure on inflation in the near term and weigh on global economic momentum.
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The IMF's broader global forecast, however, was less upbeat. It cut world growth for 2026 to 3.1% from 3.3% earlier, saying the conflict has added to uncertainty across energy markets and trade routes. The fund also warned that a longer war could hurt growth further and push inflation higher.
For India, the revision reflects relative resilience, even though the country remains exposed to higher crude prices due to its heavy dependence on imported oil.
Earlier this month, the World Bank said it sees India growing at 6.6% in FY27, while the RBI has projected 6.9% for the same year. However, both cautioned that the West Asia tensions could hurt the outlook.
The IMF's latest note also underscores the risk that any prolonged disruption in the Strait of Hormuz could hit oil supply chains and raise transport and import costs for energy-dependent economies. Reuters reported that the IMF, World Bank and IEA have urged countries not to hoard energy supplies or impose export restrictions as markets remain under stress.
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