IMF ups India’s GDP growth forecast to 7% for 2024-25
China and India are to account for nearly half of the global growth this year
Growth in India and China will account for almost half of global growth in 2024. Growth in major advanced economies is more aligned
—Gita Gopinath,
IMF’s first deputy MD
The International Monetary Fund (IMF) on Tuesday raised India’s GDP growth forecast for 2024-25 to 7 per cent from 6.8 per cent projected earlier on the back of “improving private consumption, particularly in rural India”.
“The forecast for growth in India has also been revised upward, to 7 per cent, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas,” the IMF said in its World Economic Outlook (WEO) report.
The IMF has left unchanged its estimate for India’s economic growth for 2025-26 at 6.5 per cent. “Growth in India and China will account for almost half of global growth in 2024. Growth in major advanced economies is more aligned: Euro area growth picks up as the US shows signs of cooling after a strong year,” said Gita Gopinath, IMF’s First deputy MD.
The IMF WEO put China’s growth rate at 5 per cent for 2024 and 4.5 per cent for 2025.
In a blog post that accompanied the latest update to its WEO, the IMF’s chief economist, Pierre-Olivier Gourinchas,
wrote that China and India would account for nearly half of global growth this year.
In the case of advanced countries, the GDP growth rate of the US has been forecast at 2.6 per cent for 2024 and 1.9 per cent for 2025.
Japan is expected to grow at 0.7 per cent in 2024 and improve to 1 per cent in 2025. The GDP growth for the Euro area has been forecast at 0.9 per cent in 2024 which is expected to accelerate to 1.5 per cent in 2025.
Global growth is projected to be in line with the April 2024 WEO forecast at 3.2 per cent in 2024 and 3.3 per cent in 2025.
After surging to 8.7 per cent in 2022 as the global economy rapidly recovered from the pandemic recession, worldwide inflation is expected to continue easing — from 6.7 per cent in 2023 to 5.9 per cent this year and 4.4 per cent in 2025.
But progress is slowing, the IMF said, because services inflation has proved persistently difficult to tame. The fund warned that some central banks may keep interest rates higher for longer than anticipated, until they’re convinced that inflation is firmly under control. Higher-than-expected borrowing costs could weaken global growth as a result.