India world's fastest-growing major economy: IMF upgrades 2025 & 2026 growth forecast to 6.4%; global growth lifted to 3.1% in 2026
Tired of too many ads? go ad free now
The IMF also modestly raised its global growth outlook to 3.0% in 2025 and 3.1% in 2026, citing lower-than-expected impact from tariffs, a weaker US dollar, and improved financial conditions.
The updated World Economic Outlook (WEO), released Tuesday, noted that 'growth in India is projected to be 6.4 percent in 2025 and 2026, with both numbers revised slightly upward, reflecting a more benign external environment than assumed in the April reference forecast.'
In comparison, China is forecast to grow at 4.8% in 2025 and 4.2% in 2026, while the US is expected to expand 1.9% in 2025 and 2.0% in 2026, with a temporary boost from the One Big Beautiful Bill Act fiscal package.
While global growth remains below the pre-pandemic average of 3.7%, the IMF attributes the upward revision to 'stronger-than-expected front-loading in anticipation of higher tariffs; lower average effective US tariff rates than announced in April; an improvement in financial conditions, including due to a weaker US dollar; and fiscal expansion in some major jurisdictions.'
The agency warned, however, that risks are still tilted to the downside. 'A rebound in effective tariff rates could lead to weaker growth... Elevated uncertainty could start weighing more heavily on activity, also as deadlines for additional tariffs expire without progress on substantial, permanent agreements,' it said.
On inflation, the IMF expects global headline inflation to fall to 4.2% in 2025 and 3.6% in 2026, with sharp variations across countries.
Tired of too many ads? go ad free now
'Inflation will remain above target in the United States and be more subdued in other large economies,' the report said.
The report added that 'global trade volume is revised upward by 0.9 percentage point for 2025 and downward by 0.6 percentage point for 2026', indicating that recent gains from tariff front-loading may taper off.
Among large emerging economies, India, China and Indonesia remain standout performers, with the IMF crediting India's gains partly to external stability.
For India, projections are based on the calendar year, with the agency noting that 'India's growth projections are 6.7 percent for 2025 and 6.4 percent for 2026 based on fiscal year data.'
On the upside, the IMF said the global economy could gain further if 'trade negotiations lead to a predictable framework and to a decline in tariffs. Policies need to bring confidence, predictability, and sustainability by calming tensions, preserving price and financial stability, restoring fiscal buffers, and implementing much-needed structural reforms.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
an hour ago
- Mint
Trump India tariff: Why India may not bow down to the US pressure on Russian oil imports? EXPLAINED with five reasons
Trump India tariff: After the US President Donald Trump's announcement to impose 25% tariffs on Indian imports and penalties for its Russian oil imports last week, the White House had presumed that New Delhi would come under pressure and Russian oil containers heading for the Indian ports may stop and get diverted to other countries. However, to the surprise of the US administration, especially President Donald Trump, the Indian government continued to import crude oil from Russia. India rebutted the US claims that it has stopped receiving oil consignments from Russia. After this strong rebuttal, a sharp reaction was expected from the motormouth US president, who is surprising the world by trying to solve diplomatic puzzles on social media platforms like X. US President Donald Trump on Monday warned India of higher tariffs for buying Russian oil, drawing a spirited response from New Delhi. 'India is not only buying massive amounts of Russian oil, they are then, for much of the oil purchased, selling it on the open market for big profits,' Trump posted on his social media platform Truth Social. 'They don't care how many people in Ukraine are being killed by the Russian war machine. Because of this, I will be substantially raising the tariff paid by India to the USA,' Trump said. In response, New Delhi said the targeting of India was 'unjustified and unreasonable.' Like any major economy, India would take all necessary measures to safeguard its national interests and economic security, the external affairs ministry said in a statement. According to the Indian stock market experts, New Delhi is looking beyond business and Trump's tariffs. They are looking at the long-term goal, where India will be able to ensure the safety of the national economy with its remote control over the power corridors of India, not in the US. They said that bowing down to the US pressure on Russian oil imports looks beyond possibility when the Indian government has started importing Naphtha from Russia. They listed the top five reasons: clarity in diplomacy, control over the national economy, a self-reliant defence system, naptha import from Russia, and a fool-proof reciprocal action plan. 1] Trump-India-Russia triangle: "After Operation Sindoor, the US president hinted that Pakistan was closer to them when they didn't use their veto power to stop the IMF aid to the Islamic nation. So, it seems the Indian government has made its decision that the US is their 'friend' and Russia is their 'brother.' When New Delhi has a choice, they will choose brother over friend," said Sandeep Pandey, co-founder of Basav Capital. 2] New Delhi's tough stand in India-US trade deal: Sandeep Pandey of Basav Capital said the Indian government is looking beyond Trump's tariffs and the India-US trade deal. He said that the Indian economy is agriculture-driven, where around two-thirds of the national GDP comes from the agriculture sector. Opening this sector for a foreign player like the US would jeopardise the security of the national economy, as essential triggers like inflation and economic growth would slip from the government's control. It will give access to the US and put the national economy in danger. 3] Naptha imports from Russia: "India snapping Russian crude oil import looks beyond possibility when it started importing Naptha from Russia. This move is the next step towards strengthening the Indian economy by breaking China's monopoly on importing chemicals, plastics, and chemical resins. In the wake of the Russia-Ukraine war, Russia is unable to export Naphtha to the European and some other countries, as Moscow faces sanctions from the US and European countries. This developed China's monopoly on global merchandise. This Indian move is expected to break this Chinese monopoly, and India is expected to become a net exporter of Naptha after meeting its domestic needs," said Anuj Gupta, Director at Ya Wealth. Explaining the benefits of Naphtha imports and its ability to mitigate the impact of Trump's tariffs, Seema Srivastava, Senior Research Analyst at SMC Global Securities, said, "India's decision to import Naphtha from Russia marks a significant strategic shift aimed at strengthening economic resilience and strengthening its industrial base. This move diversifies critical supply chains essential for reducing overdependence on traditional sources and brings down input costs, particularly in energy-intensive sectors like petrochemicals and defence manufacturing. As India pushes back against Chinese dominance in the chemical industry, this import strategy aligns with its goal of asserting greater control over domestic production capabilities." The SMC Global Securities expert said New Delhi's move to import Naptha from Russia signals India's commitment to economic sovereignty and strategic autonomy in an increasingly separated global landscape. As global power structures become more inconstant, India's calculated approach, balancing cost-efficiency, geopolitical leverage, and domestic industrial policy, will likely illustrate a proactive bid to safeguard its economic interests. 4] Self-reliant defence system: On how the Indian government is looking beyond Trump's tariffs by now bowing down to the US pressure and signing the India-US trade deal, Sandeep Pandey said, "The US administration is trying to kill so many sparrows from the single arrow — Russian oil imports. They know that Russia transfers both fighter jets and its technologies to India, which has enabled India to a position where it can develop fighter jets. Starting Naptha from Russia is the next step in strengthening Indo-Russian defence ties, as it would help India develop a body of fighter jets and defence drones. So, as I said earlier, accepting the US demand to stop importing Russian crude oil seems beyond reality. It will jeopardise India's defence program, and the Indian government is not in such a mood, as there is complete reluctance to break the ice for the frozen India-IS trade deal from New Delhi's side. The jittery look is on the US side when their President makes a series of U-turns." 5] Probability of reciprocal tariffs: Highlighting towards Indian strategy in not acceding to the US demands in the India-US trade deal, Avinash Gorakshkar, a SEBI-registered fundamental analyst, said, 'The way the US government has raised tariffs on Indian imports, the Indian government may also raise tariffs on US imports. However, the US tariffs are more like a bully, while the Indian tariffs would be a diplomatic move. The Indian government may also consider reimposing the digital tax on income from online digital advertisements from US companies. If they do so, it would be highly detrimental for US tech giants like Microsoft, Meta, Alphabet, Google, Amazon, etc.' Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Time of India
5 hours ago
- Time of India
US residential solar capacity may decline 46% by 2030 due to tax credit repeal: Wood Mackenzie
New Delhi: The recently enacted One Big Beautiful Bill Act (OBBBA), which phases out the Section 25D customer-owned investment tax credit (ITC) for residential solar systems after 2025, could reduce US residential solar capacity by up to 46% through 2030, according to a new report from Wood Mackenzie . The report titled 'Near-term challenges but long-term potential: evaluating the US residential solar addressable market' evaluates the projected impact of OBBBA, noting significant near-term headwinds for the sector. The removal of the residential ITC is expected to make solar systems less affordable for homeowners, causing substantial market disruption. 'Many companies will not be able to stay in business,' said Zoe Gaston , Principal at Wood Mackenzie. 'However, the market will eventually adapt, and the remaining players will diversify and find ways to cut costs. Further, rising retail rates will continue to make the residential solar value proposition more compelling.' Despite the anticipated downturn in the near term, the report highlights strong long-term growth potential. The total addressable market (TAM) for residential solar in the US is expected to reach nearly 1,500 GW by 2050. Using data from the US Census Bureau and internal projections, Wood Mackenzie estimates that approximately 92 million single-family owner-occupied homes will exist by 2050. After excluding unsuitable properties and homes with existing solar systems, more than 70 million homes remain viable for solar installations over the next 25 years. In a conservative 25-year low-case scenario, assuming only 12% TAM penetration, the market would still add 150 GW of new residential solar capacity by 2050. 'However, a lot can change in 25 years, including technological and product advancements, business model evolution, and cost declines that can accelerate residential solar growth,' said Gaston. 'We expect a more positive outcome than our low-case scenario.'
Time of India
14 hours ago
- Time of India
Company, LLP registrations continue to gain traction
Company registrations in India surged for the seventh consecutive month in July, with limited liability partnerships also experiencing a significant rise. This growth reflects investor confidence in India's economic prospects, despite global headwinds. Projections indicate India will remain the fastest-growing major economy, supported by trade agreements and government efforts to ease business compliance. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Fresh registrations of companies rose for the seventh straight month in July and those of limited liability partnerships surged for five months in a row, signalling continued investor optimism about the country's economic growth and consumption prospects despite persistent external many as 17,555 companies, including overseas entities, were incorporated in July, an 18% increase from 14,887 a year earlier, showed the latest corporate affairs ministry data. Similarly, the number of LLPs that got registered in July rose by a quarter to 7, April and July, the number of companies that got incorporated jumped over 26% from a year before to 78,696, the data showed. During this period, 30,411 LLPs got registered, a 29% rise from a year July, the International Monetary Fund projected India's growth at 6.2% for FY26 and 6.3% for FY27, more than double the global averages. However, with the US announcing a 25% additional tariff on Indian imports along with an unspecified penalty, some economists are projecting India's growth to ease a the uncertainties, India is still projected to retain its status as the world's fastest-growing major economy this fiscal year and the next, a fact that investors are likely to build into their calculations while planning fresh investments, a senior government official month, India forged a free trade agreement with the UK, and it is currently negotiating trade deals with other key economies, including the EU, to consolidate its position in these early trade deal with the US, with whom talks are continuing, could soften the tariff blow, analysts have government focus on reducing the compliance burden and making it easier for entrepreneurs to set up businesses are also encouraging entrepreneurs, officials had said earlier. Strong services trade has supported the growth in LLP registrations in recent years, the officials exports of services grew nearly 11% in the June quarter, beating a 2% increase in that of goods.
