The International Monetary Fund (IMF) has kept its forecast for India's GDP growth at 7% for the fiscal year ending March 31, 2025. This information was released in the IMF’s latest World Economic Outlook (WEO), which also projects a decline in growth to 6.5% for the fiscal year 2025-26.
The IMF explained that India's GDP growth is expected to decrease from 8.2% in 2023 to 7% in 2024, followed by 6.5% in 2025. This decline is attributed to the waning of pent-up demand that had built up during the pandemic as the economy aligns with its true potential.
Looking beyond the immediate future, the global economy is anticipated to experience slower growth in the medium term. The IMF emphasized the need for reforms during its annual meetings with the World Bank in Washington, pointing out significant areas of concern.
The report also revised its growth forecast for the US, raising its 2024 estimate to 2.8%, up from a previous prediction of 2.6%, and adjusting the 2025 projection to 2.2%, compared to the earlier estimate of 1.9%. Global growth is expected to remain steady at 3.2% for both 2024 and 2025. However, the outlook for China has been lowered to 4.8% growth for 2024, down from 5%, while the 2025 projection remains unchanged at 4.5%.
The IMF's report presents a mixed outlook for the global economy, with some optimism regarding inflation but caution regarding high debt levels and escalating geopolitical tensions. The organization specifically noted that ongoing conflicts in the Middle East could impact commodity prices and trade in that region.
"It looks like the global battle against inflation has largely been won, even if price pressures persist in some countries," said IMF chief economist Pierre-Olivier Gourinchas. He added that strong growth in the US has accompanied progress in controlling inflation, highlighting robust productivity growth in the country.
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