The International Monetary Fund (IMF) has upheld its global growth forecast of 3.2% for 2024 in its latest World Economic Outlook update released on Tuesday. However, the IMF has adjusted projections downward for the United States and Japan due to slower-than-expected starts to the year and temporary supply chain disruptions.
Asia's growth engines: China and India
Highlighting Asia's economic drivers, the IMF predicts China's economy to grow by 5.0% in 2024, buoyed by increased private consumption and robust exports. Meanwhile, India's growth forecast for the fiscal year 2024-25 has been upgraded from 6.8% to 7%, attributed largely to anticipated improvements in rural private consumption.
Caution amid optimism
Despite the positive revisions, the IMF warns of risks such as persistent inflation, trade tensions, and policy uncertainties that could impact global economic stability. It stresses the need for prudent monetary policies to mitigate these risks effectively.
Steady outlook for India
Looking ahead to the fiscal year 2025–26, the IMF maintains its GDP growth projection for India at 6.5%. The organisation had previously raised India's GDP growth forecast from 6.5% to 6.8% in April for the 2024-25 financial year, further boosting confidence in India's economic resilience.
Challenges ahead
IMF cautions against abrupt policy shifts due to upcoming elections, which could introduce volatility and affect global economic conditions negatively. It underscored the importance of managing inflation and avoiding escalations in trade tensions to sustain economic recovery.
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