Market Update: India Set To Surpass Japan As 4th Largest Economy This Year, On Track For 3rd Spot By 2028: IMF | Economy News – Full Analysis

Last Updated:April 26, 2025, 16:08 IST

India is set to become the world’s 4th largest economy in 2025 and 3rd largest by 2028, per IMF projections. India’s economy is expected to grow by 6.2% in 2025 and 6.3% in 2026.

India, which grew at 6.5 per cent in 2024-25, is projected to grow at 6.2 per cent in 2026-27, says IMF.

India GDP Growth: India is set to overtake Japan as the world’s 4th largest economy in 2025 and is on track to surpass Germany as the 3rd largest economy by 2028, according to the latest IMF projections.

As per latest projection by IMF, India will remain the fastest growing major economy over the next two years. According to the April 2025 edition of the IMF’s World Economic Outlook, India’s economy is expected to grow by 6.2 per cent in 2025 and 6.3 per cent in 2026, maintaining a solid lead over global and regional peers.

The April 2025 edition of the WEO shows a downward revision in the 2025 forecast compared to the January 2025 update, reflecting the impact of heightened global trade tensions and growing uncertainty.

In contrast, the IMF projects global economic growth to be much lower, at 2.8 per cent in 2025 and 3.0 per cent in 2026.

IMF Cuts Japan Growth Projection For 2025 Amid Tariff War

The International Monetary Fund revised its outlook for Japan, cutting its 2025 growth forecast to 0.6%, down from 1.1% projected in January. This downgrade reflects the expected negative impact of U.S. tariffs on Japan’s economic performance.

Trade War Escalation

Donald Trump’s new tariff on April 02 escalated the trade war and sent the entire world into a tailspin. However, a week later, Trump announced a pause of 90 days for new tariffs on all nations but China, on which US imposed higher retaliatory tariffs.

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