The IMF’s revised projection reflects two key factors: a slower-than-expected rise in nominal GDP and a sharper depreciation of the Indian rupee against the US dollar. 
New Delhi : India is now expected to reach the $5 trillion economy milestone a year later than previously projected, according to the International Monetary Fund’s latest assessment released this week. The updated forecast places the achievement in FY29, instead of FY28, as earlier estimated by analysts and policymakers.
The IMF’s revised projection reflects two key factors: a slower-than-expected rise in nominal GDP and a sharper depreciation of the Indian rupee against the US dollar. While the Indian economy continues to show strong real growth, the conversion effect of a weakening currency has pulled down its dollar-denominated GDP value. Under the new outlook, India is expected to cross $4 trillion in FY26, move to around $4.96 trillion in FY28, and finally reach the $5 trillion threshold the following year.
Rupee valuation has played a significant role in this recalibration. The IMF report assumes the exchange rate moving from ₹82.5 per dollar in 2023 to nearly ₹87.7 by FY27. This erosion in currency strength means that even if domestic output grows steadily in rupee terms, the dollar value of GDP expands more slowly.
Another contributing factor is the downward revision of nominal GDP growth. Earlier estimates that assumed nominal growth of 11 percent for FY26 have now been pared to about 8.5 percent, further slowing the pace of dollar-based expansion.
Despite the delay, the IMF maintains a positive outlook on India’s medium-term trajectory. Strong domestic demand, policy reforms, and expanding sectors such as manufacturing, digital services, and infrastructure continue to position India as one of the world’s fastest-growing major economies. However, the updated timeline underscores how sensitive global rankings and economic milestones have become to currency fluctuations, beyond core economic performance.
For policymakers, the revised forecast signals the need to support currency stability and maintain momentum in economic reform, even as India remains firmly on track to join the league of the world’s top economies.
New Delhi : India is now expected to reach the $5 trillion economy milestone a year later than previously projected, according to the International Monetary Fund’s latest assessment released this week. The updated forecast places the achievement in FY29, instead of FY28, as earlier estimated by analysts and policymakers.
The IMF’s revised projection reflects two key factors: a slower-than-expected rise in nominal GDP and a sharper depreciation of the Indian rupee against the US dollar. While the Indian economy continues to show strong real growth, the conversion effect of a weakening currency has pulled down its dollar-denominated GDP value. Under the new outlook, India is expected to cross $4 trillion in FY26, move to around $4.96 trillion in FY28, and finally reach the $5 trillion threshold the following year.
Rupee valuation has played a significant role in this recalibration. The IMF report assumes the exchange rate moving from ₹82.5 per dollar in 2023 to nearly ₹87.7 by FY27. This erosion in currency strength means that even if domestic output grows steadily in rupee terms, the dollar value of GDP expands more slowly.
Another contributing factor is the downward revision of nominal GDP growth. Earlier estimates that assumed nominal growth of 11 percent for FY26 have now been pared to about 8.5 percent, further slowing the pace of dollar-based expansion.
Despite the delay, the IMF maintains a positive outlook on India’s medium-term trajectory. Strong domestic demand, policy reforms, and expanding sectors such as manufacturing, digital services, and infrastructure continue to position India as one of the world’s fastest-growing major economies. However, the updated timeline underscores how sensitive global rankings and economic milestones have become to currency fluctuations, beyond core economic performance.
For policymakers, the revised forecast signals the need to support currency stability and maintain momentum in economic reform, even as India remains firmly on track to join the league of the world’s top economies.
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