IMF Concludes Article IV Consultation: India’s Growth Seen Robust Amid Global Headwinds

Inside the announcement  
According to Reuters and IMF disclosures, the Board highlighted India’s resilience in the face of global headwinds. Headline inflation is expected to remain well contained, creating room for monetary policy flexibility. The IMF also reclassified India’s foreign exchange management regime from a “stabilized arrangement” to a “crawl-like arrangement,” reflecting evolving currency dynamics.  

The consultation emphasized that India’s robust domestic demand, infrastructure push, and policy reforms continue to underpin growth. However, the IMF cautioned that external risks, including global trade tensions and financial volatility, could weigh on performance.  

Notable updates  
• IMF projects India’s GDP growth at 6.6% in FY2025/26, moderating to 6.2% in FY2026/27  
• Headline inflation expected to remain contained, supporting monetary policy flexibility  
• FX regime reclassified to “crawl-like arrangement” from “stabilized arrangement”  
• Tariff persistence could allow scope for further monetary easing  
• Growth outlook remains strong despite external headwinds, driven by domestic demand and reforms  

Major takeaway  
The IMF’s assessment underscores India’s resilience, balancing external challenges with strong domestic fundamentals. With inflation under control and growth robust, India remains well-positioned to sustain momentum, though careful policy calibration will be key in navigating global uncertainties.  

Sources: Reuters, International Monetary Fund (IMF) Article IV Consultation Reports