Strong Q2 performance may prompt IMF to upgrade India's growth outlook: Gita Gopinath

New Delhi [India], December 17 (ANI): Former IMF Chief Economist Gita Gopinath, now a Professor at Harvard University, is of the view that International Monetary Fund (IMF) will certainly raise India's growth forecast for 2025-26, on the back of robust economic growth it recorded in the first two quarters of the current fiscal.
IMF had initially projected India's growth for 2025-26 to be at 6.5 per cent. This October, the IMF revised up India's growth for 2025 to 6.6 per cent.
"But that came in before the second quarter growth numbers came out. So I expect they will move up to 7 per cent the next time they come up with their numbers," Gita Gopinath said Wednesday, speaking at the Times Network India Economic Conclave.
According to her, India is actually doing better than was predicted before.
The improvement that was seen in physical infrastructure and digital infrastructure in India is super helpful and that should continue, she noted. "But that needs to be then complemented with other ongoing reforms," she suplemented.
India's GDP growth rose to a six-quarter high of 8.2 per cent year-on-year in the second quarter of fiscal 2026, from 7.8 per cent in the previous quarter, fuelled by robust consumption and aided by the GST rate rationalisation exercise of September 2025.
In the latest RBI monetary policy review meeting, the RBI raised its GDP growth projection at 7.3 per cent for the full year, up by half a percentage point.
In 2024-25, the Indian economy grew by 6.5 per cent in real terms. The Reserve Bank of India had projected 6.5 per cent GDP growth for the fiscal year 2024-25. In 2023-24, India's GDP grew by an impressive 9.2 per cent, continuing to be the fastest-growing major economy. According to official data, the economy grew 8.7 per cent and 7.2 percent, respectively, in 2021-22 and 2022-23.
To realise the vision of 'Viksit Bharat', a developed nation dream by 2047, India will need to achieve a growth rate of around 8 per cent at constant prices, on average, for about a decade or two, the Economic Survey document for 2024-25 tabled on January 31 this year asserted.
Gita Gopinath today also said India will reach closer to its 2047 Viksit Bharat goals if it achieves persistent 8 per cent growth over the next 20 years.
"I think if India can maintain growth rates of like close to 8 per cent for 20 years, then you're getting much closer to the 2047 goals. But it is not easy to maintain even 8 per cent growth for a 20-year period on a sustained basis. That is going to require sustained reforms on a year on a year on basis. Otherwise it won't happen," she added.
Touching upon US tariffs policy, she said "we are past peak tariffs in the US for a couple of reasons."
"One, and I think the important piece is that 2026 is the year of midterm elections in the US. I don't think there's anybody who wants to have a lot of uncertainty in the run up to the elections. Tariffs have raised prices in the US, pushed up inflation by about 0.7 percentage points. So that cost of living increases is a problem for affordability. So that also dampens the incentive to raise tariffs further. And lastly, there were important legal challenges to the tariffs in the US, which I think will also scale it down. So from the US tariff perspective, I suspect we are if not at past the peak, but definitely close to the peak," she explained.
Particularly on US tariffs on India, she said both countries should work together to come up with a mutually agreeable solution.
"US is a very important partner for India. And therefore, I think it is very important that both countries, India and the US work together to come up with a mutually agreeable solution where they are. I think that's the pragmatic way forward and I know that there are a lot of discussions happening in the background and there's always the right time and things can move very quickly. So that's the only way to move forward. I think it is to continue to build that partnership," she suggested, speaking at the conclave here in the national capital. (ANI)