IMF Raises India’s GDP Forecast to 7% for 2024-25

In its latest World Economic Outlook, the IMF has increased India’s GDP growth forecast for the ongoing fiscal year to 7%, up by 20 basis points from earlier projections. This upward revision reflects improved consumption prospects, particularly in rural areas, supporting India’s economic trajectory. However, the IMF retained a slower growth rate of 6.5% for the following fiscal year.

Global Economic Outlook

Global growth projections remain stable with forecasts aligning with earlier estimates. Asia, led by strong performance in China and India, continues to drive nearly half of global growth. Advanced economies like the United States and the euro area are seeing converging growth rates, albeit with different dynamics.

Inflation and Monetary Policy

The IMF highlights persistent services price inflation as a barrier to disinflation efforts, complicating the normalization of monetary policies worldwide. The report suggests careful policy sequencing to ensure price stability while managing inflation risks, particularly amidst escalating trade tensions and policy uncertainties.

Long-term Economic Prospects

Looking ahead, the IMF projects a gradual slowdown in China’s growth by 2029 and anticipates varied momentum across economies as cyclical factors diminish. Upside risks to inflation, especially in advanced economies like the United States, underscore the need for cautious economic management to sustain global growth.