India Remains World's Fastest-Growing Major Economy as IMF Trims Growth Forecast for 120+ Countries

Strategic Insights -

The International Monetary Fund (IMF) has released a report projecting significantly weaker global growth at 2.8 per cent for 2025, with over 120 countries expecting growth downgrades, making up 86 per cent of world GDP. This comes as India continues to remain the world's fastest-growing major economy, with a growth forecast of 6.2 per cent in 2025 and 6.3 per cent in 2026, outpacing second-ranked China's economic growth forecast of 4 per cent for 2025 and 4.6 per cent in 2026.

Key Takeaways:

  • The IMF has trimmed the growth forecast for over 120 countries, making up 86 per cent of world GDP, to 2.8 per cent for 2025.
  • India is expected to remain the world's fastest-growing major economy, with a growth forecast of 6.2 per cent in 2025 and 6.3 per cent in 2026.
  • The US is expected to see its GDP growth slow to 1.8 per cent in 2025 and 1.7 per cent in 2026, with the Euro Area slowing to 0.8 per cent growth rate in 2025.
  • Germany is expected to experience zero growth in 2025, followed by 0.9 per cent in 2026, while France is predicted to post a 0.6 per cent and 1 per cent growth for the two years, respectively.
  • Spain is expected to be the only European country to clock a 2.5 per cent growth rate in 2025, slowing down to 1.8 per cent in 2026.
  • The UK is expected to post a 1.1 and 1.4 per cent growth respectively for the two years, with Japan experiencing a hard hit by the global trade war, with its growth stagnating at 0.6 per cent for both years.
  • The IMF's report suggests that the sharp increase in tariffs and uncertainty will lead to a significant slowdown in global growth in the near term.

Statistics:

  • 120+ countries have seen their growth forecast trimmed by the IMF, making up 86 per cent of world GDP.
  • India's growth forecast for 2025 and 2026 is 6.2 per cent and 6.3 per cent, respectively.
  • China's economic growth forecast for 2025 and 2026 is 4 per cent and 4.6 per cent, respectively.
  • The US GDP growth forecast for 2025 and 2026 is 1.8 per cent and 1.7 per cent, respectively.
  • The Euro Area's growth forecast for 2025 and 2026 is 0.8 per cent and 1.2 per cent, respectively.
  • Germany's growth forecast for 2025 and 2026 is zero per cent and 0.9 per cent, respectively.
  • France's growth forecast for 2025 and 2026 is 0.6 per cent and 1 per cent, respectively.
  • Spain's growth forecast for 2025 and 2026 is 2.5 per cent and 1.8 per cent, respectively.
  • The UK's growth forecast for 2025 and 2026 is 1.1 per cent and 1.4 per cent, respectively.
  • Japan's growth forecast for 2025 and 2026 is 0.6 per cent.

Sources:

  • IMF Report, April 2025 World Economic Outlook
  • IMF Chief Economist Gita Gopinath's post on X