In its recent World Economic Outlook, IMF has raised India’s GDP growth forecast to 7.6 per cent from 7.3 per cent for FY26 and to 6.5 per cent from 6.4 per cent for both FY27 and FY28 despite heightened geopolitical uncertainty and unprecedented global energy crises. At the same time, world output growth has been cut by 0.2 percentage points, Germany’s by 0.3 and the UK’s by 0.5, while Japan’s growth remains unchanged at 0.7 per cent for 2026.
What has made headlines is the Indian economy slipping to sixth position globally after briefly surpassing Japan to climb to fourth in 2025. The UK economy, which India had overtaken in 2022, has regained the fifth position. To the casual observer, this appears to signal a reversal of economic reality — Japan and UK resurgence alongside an Indian slowdown. Neither is the Indian economy slowing absolutely or relatively nor is there any sign of a reversal in trajectory.
Post pandemic, India has registered a real GDP growth rate of CAGR 8 per cent since FY22, retaining the tag of the world’s fastest-growing major economy. Economic Survey 2026 highlights that medium term growth potential has strengthened to 7 per cent, above the IMF’s forecast of 6.5 per cent for FY27 and FY28. By comparison, the UK and Japan registered a CAGR of 3.2 per cent and 1.3 per cent, respectively, between 2021 and 2025, far below India’s pace, while their medium-term outlook continues to weaken.
