IMF raises India’s economic growth projection for 2024, 2025 to 6.5%

31 Jan 2024 Evaluate

Raising India’s economic growth projection for 2024 and 2025 by 20 basis points (bps) to 6.5%, the International Monetary Fund (IMF) in its latest World Economic Outlook update has said that the country will emerge as the fastest-growing economy yet again. It said growth in India is projected to remain strong reflecting resilience in domestic demand. On the other hand, it said other major economies will be showing modest growth. As per the report, the US will grow at 2.1 per cent, Germany will grow at 0.5 per cent, France at 1 per cent, Japan at 0.9 per cent and China at 4.6 per cent.

The IMF said that with disinflation and steady growth, the risks to global growth are broadly balanced and there is a possibility of a 'soft landing'. It noted ‘Global growth is projected at 3.1 per cent in 2024 and 3.2 per cent in 2025, with the 2024 forecast 0.2 percentage point higher than that in the October 2023 World Economic Outlook (WEO) on account of greater-than-expected resilience in the United States and several large emerging market and developing economies, as well as fiscal support in China’.

It said that faster disinflation could lead to further easing of financial conditions and stronger structural reform momentum could bolster productivity with positive cross-border spillovers However, it also highlighted that a spike in new commodity price spikes from geopolitical shocks -- including continued attacks in the Red Sea -- and deepening property sector woes in China could also cause growth disappointments.