IMF backs India GDP calculation methodology as growth forecast rises to 7%

The International Monetary Fund has backed India's updated gross domestic product calculation methodology, confirming that the country's statistical framework aligns with international standards as economic growth accelerates.

Speaking on Thursday, Krishna Srinivasan, director of the IMF's Asia and Pacific Department, called the methodological update by the Ministry of Statistics and Programme Implementation a welcome development that reflects recommendations from the global lender's statistics team.

Srinivasan noted that the ministry had published detailed notes explaining the adjustments and praised the ongoing work to strengthen national accounts. His comments confirm that India's statistical practices remain credible and aligned with global norms.

Upgraded economic growth outlook

The IMF's endorsement coincides with a broader vote of confidence in India's expanding economy. In its flagship World Economic Outlook report, the IMF raised its growth forecast for India for the 2026-27 financial year to 7%, up from the 6.4% projected in July.

The IMF attributed the upward revision to strong domestic demand, expanding services activity, favourable demographic dynamics, and sustained structural reforms. The organization also increased its growth projection for 2027-28 by 0.3 percentage points to 7%, underscoring the long-term durability of the nation's economic expansion.

Methodological base year update

The methodological changes follow India's strong 7.8% GDP growth reported for the June quarter. The Ministry of Statistics updated the base year for GDP calculations to the financial year ending March 2023, modernising the framework to better capture the scale of economic activity.

While critics had raised questions over data adjustments, Chief Economic Advisor V Anantha Nageswaran clarified that updating the base year was a standard statistical procedure necessary to reflect structural changes across sectors. The IMF's verification provides international validation for the government's approach.

Fundamental economic strength

Addressing pressure on the Indian rupee following recent global energy shocks, Srinivasan explained that exchange rate fluctuations stemmed from global interest rates, investor risk appetite, and world oil prices rather than any weakness in India's economy.

He emphasized that India navigated global market disruptions from a position of core economic strength, demonstrating strong fundamentals and stability across key macroeconomic parameters.