The IMF’s latest assessment comes at a moment of uncertain global economic conditions. Julie Kozack cautioned ahead of the January 2026 World Economic Outlook (WEO) update that India’s performance has been “quite robust,” driven in large part by strong domestic consumption and policy considerations.
“What we have seen is that third-quarter growth in India has outshone expectations,” Kozack said. She stressed that the IMF’s previous forecast of 6.6% for the 2025–26 fiscal year is expected to be now probably upgraded. This upbeat trajectory only reinforces the claim of India as the world’s fastest-growing major economy as measured against behemoths like China and the United States in terms of real GDPs.
The ‘Dead Economy’ Controversy
The IMF’s comments are a direct challenge to Congress’s leader Rahul Gandhi, who in late 2025 famously echoed the words of President Donald Trump, calling India a “dead economy." Gandhi had blamed this purported fall on demonetization, the institution of GST and a supposed “Adani-Modi” nexus. But the IMF’s data gives a far different story. In developed societies that continue to stumble with low growth (sub-2% or less), India has now overtaken Japan, becoming the world’s fourth-largest economy, where real gross domestic product (GDP) expanded by 8.2% in Q2 FY 2025–26 alone.
India: A Global Growth Engine
Economists at the IMF highlighted that India is “not only growing but is a key driver” of global prosperity.
- Domestic Buffers: Strong domestic demand has sheltered India from the “tariff shocks” seen in mid-2025.
- Fiscal Consolidation: The IMF commended India’s mild inflation and India’s fiscal policy with its commitment to fiscal stability.
- Global Share: India and China are predicted to account for over 50% of world growth in 2026.
And the pole position is still secure for India despite external challenges such as changing trade policies and slowdown in global trade destinations. The IMF is expected to announce its official revised targets next week, and many have been hoping that official revised numbers will lead India to a pace in growth that is between 6.8% and 7% year-on-year.
