IMF Raises India’s Growth Forecast to 7.3% for Current Financial Year
The International Monetary Fund (IMF) has raised India’s economic growth forecast for the current financial year to 7.3 percent. According to rating agency Moody’s, strong economic expansion will support average household incomes and boost demand for insurance products.
In its report on India’s insurance sector, Moody’s stated that the industry is expected to benefit from sustained premium growth driven by robust economic expansion, increasing digitalization, tax reforms, and proposed changes in the government-owned insurance sector.
The rating agency noted that these factors are likely to improve the sector’s currently weak profitability. Moody’s said, “We expect India’s economy to grow at 7.3 percent in FY 2025–26, higher than 6.5 percent recorded in the previous financial year. This will lead to higher average incomes and support insurance demand.”
GDP and Insurance Premium Growth
In FY 2024–25, India’s per capita GDP increased by 8.2 percent year-on-year to USD 11,176, while overall GDP growth stood at 6.5 percent.
Moody’s reported that strong economic growth helped total insurance premium income rise by 17 percent to ₹10.9 lakh crore during the first eight months (April–November) of FY 2025–26.
During this period, health insurance premiums increased by 14 percent, while new business premiums in life insurance grew by 20 percent.
This growth was faster than in FY 2024–25, when total premium income rose by only 7 percent to ₹11.9 lakh crore.
Role of Digitalization and Insurance Awareness
According to Moody’s, the rise in premium income reflects increasing risk awareness among Indian consumers as well as continuous digitalization of the economy. Digital platforms have made the distribution and sale of insurance products easier and more accessible.
This trend aligns with the insurance regulator’s vision of achieving “Insurance for All by 2047.”