The International Monetary Fund (IMF) Chief Economist, Pierre-Olivier Gourinchas, predicted on Tuesday that India’s growth prospects will remain strong despite increasing global uncertainty caused by the Middle East conflict and that inflation would continue to rise steadily.
“India has been doing very, very well in 2025,” Gourinchas said during a group interview with journalists from India, Japan, the United Arab Emirates, the Netherlands, and Chile, adding that growth is now predicted at “7. 6 percent” on a fiscal year basis.
The IMF is predicting a “6. 5” percent growth rate in 2026, which he claims represents a “very slight upgrade” from previous forecasts and suggests that momentum is anticipated to continue into the coming year.
Despite challenges brought by the continuing conflict in the Middle East, which has increased world energy prices and generated worries for oil-dependent economies like India, the forecast has been revised.
“The Middle East war is having a negative impact, but the impetus from 2025 will more than make up for it,” he stated.
Additionally, Gourinchas cited the reduction of trade disputes between India and the United States as a contributing factor.
The tariff rate has decreased, and the ambiguity surrounding it has been alleviated, as a result of trade talks between the US and India, he said.
In India, however, the IMF expects inflationary forces to rise in the next year. Due in part to rising food expenses and higher world energy prices, he claimed, “We are seeing an increase in inflation for 2026 to 4. 7 percent.”
He continued, “In India, we’ve seen food prices that have been rising in early 2026.”
Although the immediate outlook is still positive, Gourinchas warned that India’s structural reliance on energy imports makes it vulnerable to a turbulent global landscape.
It relies heavily on energy. He also said that it is heavily reliant on oil and cautioned that these circumstances may cause “some headwinds going forward. ”
He also stated that India’s current growth path is largely in line with its long-term potential.
“We have kind of a potential growth level that is about 6. 5 percent,” he said.
At a time when many nations are struggling with decelerating growth and increasing uncertainty, the IMF’s assessment highlights India’s role as a major engine of the global economy.
Following the increase in conflict in the Middle East, which has disrupted energy flows and raised oil and commodity prices, the global environment has become more difficult.
According to the IMF, the length and severity of the shock will determine how it affects the global economy as a whole.
Recently, India has maintained robust domestic demand and investment momentum, aided by policy stability and a resilient private sector, making it one of the quickest developing major economies.