IMF Raises India’s GDP Forecast and Global Growth Projection for 2024-25

The International Monetary Fund (IMF) has revised India’s GDP growth forecast for 2024-25 upwards by 30 basis points to 6.8%, citing strong domestic demand. This projection, while robust, falls slightly below the Indian government’s forecast of 7%. Additionally, the IMF raised its global growth projection for 2024 by 10 basis points to 3.2%, highlighting the resilience of the world economy amidst challenges.

India’s GDP Growth Projections

The IMF projects India’s GDP to grow at 6.8% in FY25, with a slight dip to 6.5% in FY26, attributing the strength to robust domestic demand and a growing working-age population. For FY24, the IMF raised its GDP growth projection to 7.8%, reflecting continued economic momentum.

Rating Agencies’ Assessments

Rating agencies like Fitch and Barclays also revised India’s GDP growth projection for FY24 upwards to 7.8%, citing strong domestic demand and positive business and consumer confidence. The finance ministry echoes this optimism, foreseeing stable inflation and a positive employment outlook, despite challenges like rising crude oil prices and global supply chain disruptions.

Global Growth Projection

The IMF raised its global growth projection for 2024 to 3.2%, noting slightly faster growth in advanced economies and stable growth in emerging markets. Despite concerns, the world economy avoided recession, with resilient banking systems and steady growth in major emerging economies.

China’s Economic Outlook

China’s GDP growth is expected to slow down due to easing one-off factors and weaknesses in the property sector, with projections revised downwards to 4.6% in 2024 and 4.1% in 2025. However, IMF Chief Economist Pierre-Olivier Gourinchas hinted at a possible upward revision, considering China’s stronger-than-expected growth in the first quarter of 2024.

IMF’s Outlook and Warnings

IMF Chief Economist Pierre-Olivier Gourinchas emphasized the global economy’s resilience, anticipating a soft landing with minimal economic scarring. However, he cautioned about the challenges ahead, stressing the need for significant global investments to ensure a green and climate-resilient future.