New York, Apr 22 (PTI) The Indian economy is projected to grow at 6.2 per cent in 2025-26, slower than earlier estimated rate of 6.5 per cent, due to escalated trade tensions and global uncertainty, the International Monetary Fund (IMF) said on Tuesday.

“For India, the growth outlook is relatively more stable at 6.2 per cent in 2025, supported by private consumption, particularly in rural areas,” IMF said in its World Economic Outlook (WEO).

India, which grew at 6.5 per cent in 2024-25, is projected to grow at 6.2 per cent in 2026-27, IMF said, adding that the growth rate is 0.3 percentage point lower than that in the January 2025 WEO update on “account of higher levels of trade tensions and global uncertainty”.

According to the report, the global growth is projected at 2.8 per cent in 2025, lower by 0.5 percentage points estimated earlier. In 2026, the global economy is estimated to grow at 3 per cent.

For advanced economies, the report said that growth under the reference forecast is projected to drop from an estimated 1.8 per cent in 2024 to 1.4 per cent in 2025 and 1.5 per cent in 2026. Growth for 2025 is now projected to be 0.5 percentage point lower relative to that in January 2025 WEO update projections.

The forecasts for 2025 include significant downward revisions for Canada, Japan, the United Kingdom, and the United States and an upward revision for Spain.

For the United States, growth is projected to decrease in 2025 to 1.8 per cent, 1 percentage point lower than the rate for 2024 as well as 0.9 percentage point lower than the forecast rate in the January 2025 WEO update.

“The downward revision is a result of greater policy uncertainty, trade tensions, and a softer demand outlook, given slower-than-anticipated consumption growth. Tariffs are also expected to weigh on growth in 2026, which is projected at 1.7 per cent amid moderate private consumption,” it said.

After a marked slowdown in 2024, growth in emerging and developing Asia is expected to decline further to 4.5 per cent in 2025 and 4.6 per cent in 2026. Emerging and developing Asia, particularly Association of Southeast Asian Nations (ASEAN) countries, has been among the most affected by the April tariffs.

For China, 2025 GDP growth is revised downward to 4.0 per cent from 4.6 per cent in the January 2025 WEO update. This reflects the impact of recently implemented tariffs, which offset the stronger carryover from 2024 (as a result of a stronger-than-expected fourth quarter) and fiscal expansion in the budget.

Growth in 2026 is also revised downward to 4.0 per cent from 4.5 per cent in the January 2025 WEO update on the back of prolonged trade policy uncertainty and the tariffs now in place.

IMF said that after enduring a prolonged and unprecedented series of shocks, the global economy appeared to have stabilised, with steady yet underwhelming growth rates. “However, the landscape has changed as governments around the world reorder policy priorities and uncertainties have climbed to new highs.” “Intensifying downside risks dominate the outlook, amid escalating trade tensions and financial market adjustments. Divergent and swiftly changing policy positions or deteriorating sentiment could lead to even tighter global financial conditions.

“Ratcheting up a trade war and heightened trade policy uncertainty may further hinder both short-term and long-term growth prospects. Scaling back international cooperation could jeopardize progress toward a more resilient global economy,” it said.

The agency said that at this critical juncture, countries should work constructively to promote a stable and predictable trade environment and to facilitate international cooperation, while addressing policy gaps and structural imbalances at home.

“This will help secure both internal and external economic stability. To stimulate growth and ease fiscal pressures, policies that promote healthy aging and enhance labor force participation among older individuals and women could be implemented,” it said.

Additionally, productivity growth can be fostered with better integration of migrants and refugees and mitigation of skill mismatches. PTI YAS NKD CS HVA