India’s growth outlook remains strong despite global uncertainty stemming from the Middle East conflict, according to the Chief Economist of the International Monetary Fund (IMF), Pierre-Olivier Gourinchas. Gourinchas stated that India is performing well in 2025, with a growth rate of 7.6 percent on a fiscal year basis. The IMF projects a steady expansion for India, with an estimated growth rate of 6.5 percent in 2026, slightly higher than previous estimates.
The ongoing conflict in the Middle East has led to increased global energy prices, impacting oil-dependent economies like India. However, Gourinchas highlighted that the positive momentum from 2025 is offsetting these challenges. He also mentioned that easing trade tensions between India and the United States are contributing to India’s economic stability.
Despite the positive outlook, the IMF anticipates inflationary pressures in India to rise in the coming year, with an expected inflation rate of 4.7 percent in 2026. This increase is attributed to higher global energy prices and escalating food costs. Gourinchas emphasized India’s structural dependence on energy imports as a potential vulnerability in a volatile global environment.
While acknowledging India’s current growth trajectory aligns with its long-term potential, Gourinchas cautioned about the country’s reliance on energy imports, particularly oil. He noted that India’s growth rate is around 6.5 percent, emphasizing its role as a key driver of global growth amid a challenging economic landscape.
