The International Monetary Fund (IMF) has backed India’s recent changes to its gross domestic product (GDP) data, saying the revised methodology follows good practice. It has also said that pressure on the rupee should not be seen as a sign of economic failure, as India entered the energy shock with strong economic fundamentals, reported The Economic Times.
Speaking at a press briefing in Bangkok on Thursday, Krishna Srinivasan, Director of the IMF’s Asia and Pacific Department, said India had entered the shock with strong growth and fiscal discipline and had
The rupee has gained for four consecutive sessions after the Reserve Bank of India (RBI) announced measures on October 10 to curb its fall.
Srinivasan said pressure on the rupee does not mean that India’s economic growth and currency performance are disconnected.
The exchange rate depends on global interest rates, investor risk appetite and oil prices, he said. As a major oil importer, India has been affected by the energy shock.
He added that currency movements should not be treated as a measure of whether an economy is succeeding or failing.
The IMF’s Regional Economic Outlook for Asia and the Pacific, released on Thursday, noted that several emerging economies faced currency pressure following the energy shock. It said some of this pressure had eased over the past few months and listed India among the countries that had intervened in foreign exchange markets.
The IMF’s World Economic Outlook also highlighted the wider global challenges, noting that benchmark interest rates in advanced economies had climbed to multi-decade highs, increasing borrowing costs for emerging markets. Exchange rates have also remained volatile, particularly in Asia.
The IMF’s baseline forecast assumes oil prices of around $96 per barrel in 2026, with the Strait of Hormuz reopening from March 2027.
The RBI introduced a special window on October 10 to meet the daily dollar requirements of three state-owned oil marketing companies — Indian Oil, Hindustan Petroleum and Bharat Petroleum, according to PTI. The window began operating on October 12 and will remain in place until further notice.
The measure takes the companies’ dollar demand out of the spot market.
The central bank also tightened rules on foreign exchange derivatives to curb speculative bets against the rupee. Authorised dealers cannot allow users to rebook cancelled rupee forex derivative contracts.
Banks must also maintain a Foreign Exchange Risk Reserve equal to 20% of the notional value of each eligible contract exceeding $2 million. The requirement applies to contracts hedging current account transactions where users buy foreign currency against the rupee.
The rupee closed at 95.17 against the dollar on Wednesday, marking its fourth consecutive session of gains and its highest level in a month, according to PTI. It gained 171 paise over the four sessions, with forex traders attributing the recovery to the RBI’s measures.
Finance Minister Nirmala Sitharaman said on Tuesday that the rupee had depreciated significantly over the past year and a half. She added that the RBI would continue working to prevent excessive volatility, while noting that external challenges accounted for much of the pressure.
In its October 7 policy statement, the RBI said it remained committed to orderly exchange rate adjustments in line with economic fundamentals and to curbing excessive volatility.
India’s foreign exchange reserves stood at $734.6 billion as of October 2, enough to cover around 11 months of imports, the central bank said. It also reported net foreign portfolio investor outflows of $10.3 billion between April and October 5, while net foreign direct investment rose to $13.8 billion during April-August.
Srinivasan also welcomed India’s recent revisions to its GDP data, saying the changes were consistent with the advice provided by the IMF, including its statistics department.
He said the Ministry of Statistics and Programme Implementation (MoSPI) had followed good practice in revising the methodology used to calculate GDP.
Srinivasan acknowledged MoSPI’s efforts to improve India’s GDP statistics, while noting that there was still room for improvement.
MoSPI released a new GDP series on February 27, adopting 2022-23 as the base year instead of 2011-12. The ministry said the quarterly estimates follow the guidelines in the IMF’s Quarterly National Accounts Manual of 2017.
The IMF’s World Economic Outlook projects India’s growth at 7% in both 2026-27 and 2027-28. On a calendar-year basis, it expects growth of 7.4% in 2026 and 7% in 2027.
The 2026 forecast is 0.5 percentage point higher than the estimate released in April and 0.6 percentage point above the July projection.
The report said India remained among the fastest-growing major economies, supported by resilient domestic demand and strong services activity.
It also highlighted India’s medium-term prospects, citing favourable demographics, a large and expanding domestic market and continued structural reforms. Among major economies, India stands out because it does not need additional fiscal consolidation beyond current plans to keep its debt ratio at 2025 levels, the report said.
Srinivasan said Asia’s growth is projected to ease from 5% in 2025 to 4.8% in 2026 and 4.4% in 2027, although the region is still expected to grow faster than the global economy.
Srinivasan said India’s growth had exceeded expectations, while countries that had not directly benefited from the technology boom had seen their growth forecasts lowered.
However, risks remain tilted towards slower growth. These include prolonged or renewed tensions in the Middle East and the possibility of an El Nio event adding to inflation and fiscal pressures.
Srinivasan said government support for people affected by such shocks should be targeted, with the aim of protecting people rather than prices.
He also identified four priorities for the region: addressing youth unemployment and skill gaps while helping workers adapt to artificial intelligence, strengthening social protection, improving energy security and deepening regional integration.