On Tuesday, the International Monetary Fund (IMF) increased its predictions for India’s economic development, forecasting a 7% growth rate in 2024–25, up from 6.8% in April. Stronger-than-anticipated growth in 2023 and better private consumption prospects, particularly in rural areas, serve as the foundation for this upward revision.
According to the IMF’s most recent World Economic Prognosis Update, India’s growth reflects the carryover of positive revisions made for 2023, as well as a favourable prognosis for rural consumption.
However, the global economic situation remains tough. The IMF has maintained its global growth projection for 2024 at 3.2%, which is consistent with its April forecast, and expects a modest uptick to 3.3% in 2025. Inflationary risks have increased, potentially leading to longer periods of higher interest rates in the face of growing trade tensions and greater policy uncertainty.
The IMF emphasised the importance of a carefully sequenced policy mix for achieving price stability and rebuilding depleted buffers. This method is critical for striking the difficult balance between limiting inflation and promoting economic growth. The IMF’s updated outlook for India emphasises the country’s resilience and economic potential, even as the global economy faces major headwinds.
