New Delhi, July 17, 2024.
Improved consumption prospects, particularly in rural areas, are expected to support the country’s growth trajectory in the ongoing financial year 2024-25, the International Monetary Fund (IMF) said on Tuesday while revising India’s growth forecast upward by 20 basis points to 7 per cent.
For the next financial year, the IMF retained the projection at a slower growth rate of 6.5 per cent, as stated in its latest edition of the World Economic Outlook.
“The forecast for growth in emerging markets and developing economies has been revised upward; this increase is powered by stronger activity in Asia, particularly China and India. The forecast for growth in India has also been revised upward to 7 per cent this year, reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas,” the IMF noted.
India’s economy is now forecast to expand by 7 per cent, up from the 6.8 per cent the IMF projected in April. Overall, global growth is projected to align with the April 2024 World Economic Outlook forecast, at 3.2 per cent in 2024 and 3.3 per cent in 2025.
Asia’s emerging market economies remain the main engine for the global economy, with growth in India and China being revised upward and accounting for almost half of global growth, Pierre-Olivier Gourinchas, Economic Counsellor and Director of Research at the IMF, said in a blog. He pointed out that prospects for the next five years remain weak, largely due to waning momentum in emerging Asia. “By 2029, growth in China is projected to moderate to 3.3 per cent, well below its current pace,” he added.
