IMF Praises India’s Robust Growth, Urges Fiscal Discipline In 2025 Article IV Review

India’s economy continues to demonstrate resilience and strong fundamentals, according to the International Monetary Fund’s (IMF) latest Article IV Consultation concluded on November 26, 2025. The Executive Board highlighted India’s robust growth trajectory, declining inflation, and resilient financial sector, while also cautioning on fiscal challenges and the need for accelerated reforms.  

Key highlights from the announcement include  

• India’s GDP grew 6.5% in FY2024/25 and expanded 7.8% in Q1 FY2025/26, supported by domestic demand.  
• Headline inflation declined significantly, driven by subdued food prices, easing pressure on households.  
• The financial and corporate sectors remain resilient, with capital buffers intact and non-performing assets at multi-year lows.  
• Fiscal consolidation has advanced, but the IMF stressed the importance of strict spending discipline to meet deficit targets.  
• The current account deficit has been contained, supported by resilient service exports.  
• Executive Directors welcomed India’s new labour reforms, noting they strengthen structural transformation toward the government’s Viksit Bharat vision.  
• The IMF urged India to replenish fiscal buffers and review medium-term debt targets to ensure sustainability.  
• Structural reforms in labour, land, and capital markets were emphasized as critical for sustaining high growth.  
• Despite external headwinds, growth is projected at 6.6% in FY2025/26, moderating to 6.2% in FY2026/27.  
• Directors commended India’s digital governance and green transition efforts, highlighting their role in long-term competitiveness.  

The IMF’s assessment reflects confidence in India’s economic fundamentals while underscoring the need for vigilance. With global uncertainties and trade tensions persisting, India’s ability to balance growth with fiscal prudence will be key to achieving its ambition of becoming a developed economy under the Viksit Bharat vision.  

Sources: IMF Press Release, Moneycontrol, Financial Express, Disruption Banking