The International Monetary Fund (IMF) on Tuesday raised India's growth forecast to 6.8 per cent, up from its previous estimate of 6.5 per cent in January this year. The revision is attributed to strong domestic demand and a growing working-age population. India maintains its position as the world's fastest-growing economy, surpassing China's growth projection of 4.6 per cent for the same period.
"Growth in India is projected to remain strong at 6.8 per cent in 2024 and 6.5 per cent in 2025, with the robustness reflecting continuing strength in domestic demand and a rising working-age population," said the latest edition of the World Economic Outlook released by the IMF ahead of the annual spring meetings of the IMF and the World Bank.
IMF on growth rate of Asia
Meanwhile, the IMF anticipates a decline in growth for emerging and developing Asia, dropping from an estimated 5.6 per cent in 2023 to 5.2 per cent in 2024 and further to 4.9 per cent in 2025. This adjustment represents a slight increase compared to the January 2024 World Economic Outlook (WEO) update. Notably, the IMF's January update had forecasted a growth rate of 6.5 per cent for India in 2024. "Growth in China is projected to slow from 5.2 per cent in 2023 to 4.6 per cent in 2024 and 4.1 per cent in 2025, as the positive effects of one-off factors -- including the post-pandemic boost to consumption and fiscal stimulus -- ease and weakness in the property sector persists," the IMF said.
Global growth, estimated at 3.2 per cent in 2023, is projected to continue at the same pace in 2024 and 2025. The forecast for 2024 is revised up by 0.1 percentage point from the January 2024 WEO Update, and by 0.3 percentage point from the October 2023 WEO, the IMF said.
What did IMF's chief economist said?
Policymakers should prioritize steps toward greater economic resilience such as strengthening government finances and revitalizing economic growth prospects, said Pierre-Olivier Gourinchas, chief economist of the IMF. "Despite gloomy predictions, the global economy remains remarkably resilient, with steady growth and inflation slowing almost as quickly as it rose. The journey has been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, an energy and food crisis triggered by Russia's war on Ukraine, a considerable surge in inflation, followed by a globally synchronized monetary policy tightening," he said.
The chief economist said global growth bottomed out at the end of 2022, at 2.3 per cent, shortly after median headline inflation peaked at 9.4 per cent. Growth this year and next will hold steady at 3.2 per cent, with median headline inflation declining from 2.8 per cent at the end of 2024 to 2.4 per cent at the end of 2025. Most indicators continue to point to a soft landing, he observed.
(With inputs from PTI)
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