India is set to retain its position as the world's fastest-growing major economy, with the International Monetary Fund (IMF) projecting the country's economy to expand by 7 per cent in calendar year 2026. The latest forecast places India comfortably ahead of China and the United States, reinforcing its position as the strongest-performing large economy at a time when global growth remains subdued.

The IMF's latest World Economic Outlook (WEO) update says India's economic momentum is being driven by resilient domestic consumption and sustained expansion in the services sector. While several advanced economies continue to grapple with slowing growth and geopolitical uncertainties, India's demand-led economy is expected to remain a key engine of global expansion.

According to the IMF, China is expected to record GDP growth of 4.6 per cent in 2026 before slowing further to 4.1 per cent in the following year. The United States is projected to grow by 2.3 per cent this year and 2.2 per cent next year, highlighting the significant gap between India and the world's two other largest economies.

The IMF also released projections based on India's fiscal year, estimating growth at 6.4 per cent in 2026-27, before improving to 6.7 per cent in 2027-28. Although the current fiscal-year estimate has been trimmed slightly from the IMF's April forecast, the outlook for the following fiscal year has been revised upward.

The report attributes India's strong outlook to continued strength in private consumption, robust services activity and steady domestic demand, factors that have helped the economy remain resilient despite external headwinds.

Globally, the IMF has projected economic growth of 3 per cent for 2026, with a modest improvement to 3.4 per cent in 2027. Even against this backdrop, India's expected growth remains more than twice the global average.

The global lender said the world economy has so far absorbed the economic impact of the conflict in the Middle East better than initially feared. It noted that disruptions through commodity prices, inflation expectations and financial markets have remained relatively contained. It also pointed to the rapid adoption of artificial intelligence and the ongoing technology cycle as factors supporting global demand.

The IMF's latest assessment broadly aligns with forecasts issued by several other institutions in recent months.

The World Bank expects India to grow by 6.6 per cent during the current fiscal year before accelerating to 7.2 per cent in the next. The United Nations has projected 6.4 per cent growth, citing strong consumer demand, public investment and services exports as key drivers.

The Reserve Bank of India has maintained a 6.6 per cent growth estimate for the current fiscal year. Meanwhile, global financial institutions have also turned more optimistic. Bank of America recently raised its 2026 GDP forecast for India to 7 per cent, while Goldman Sachs upgraded its calendar-year projection to 6.8 per cent.

The latest IMF forecast reinforces India's position as the fastest-growing major economy in the world, with domestic demand, expanding services and continued investment expected to keep growth well ahead of both China and the United States despite an uncertain global environment.

With IANS inputs