IMF Ups India's GDP Growth Forecast To 6.8 pc For 2024-25: IMF

The International Monetary Fund has revised India's growth forecast upwards, driven by strong domestic demand and a growing working-age population, with the Reserve Bank of India projecting a 7 per cent growth for the current financial year.
IMF Raises India's GDP Growth Projection to 6.8 pc for 2024-25

IMF Raises India's GDP Growth Projection to 6.8 pc for 2024-25 (Image Source: iStockphoto)

In an optimistic turn for India's financial landscape, the International Monetary Fund (IMF) has recently updated its economic forecast for the country, marking a significant uptick to 6.8 per cent GDP growth for the fiscal year 2024-25. This positive adjustment is largely attributed to the twin engines of strong domestic demand and a burgeoning working-age population, signaling robust economic health in what is Asia's third-largest economy.
Echoing this sentiment, the Reserve Bank of India (RBI) has projected an even more buoyant figure for the current financial year, estimating a growth rate of 7 per cent.
The World Bank's recent warnings about the Middle East and North Africa (MENA) paint a stark contrast to India's growth narrative. The MENA region grapples with stagnant growth, burgeoning debt, and the specter of ongoing conflicts, all coalescing into a formidable challenge for economic stability. Particularly alarming are the figures from the Gaza Strip, where GDP has nosedived by 86 per cent in the last quarter of 2023, and the West Bank's descent into recession.
The debt concerns are not exclusive to conflict zones, with oil-importing countries in the MENA region wrestling with debt-to-GDP ratios exceeding 90 per cent. This precarious financial situation casts a long shadow over the capacity of these nations to finance crucial social programs and manage debt servicing.
Despite these global headwinds, India remains a bright spot. The United Nations has pegged India's GDP growth at 6.2 per cent in 2024, buoyed by vigorous domestic demand and expansions in both the manufacturing and services sectors. The momentum is expected to continue into 2025, with forecasts suggesting a growth rate of 6.6 per cent, underpinned by resilient private consumption and public investment.
However, this global economic interconnectivity brings its own set of challenges. Notably, the robust economic performance of the United States, with its attendant high inflation and tight monetary policy, poses potential risks.
This concern is likely to be a focal point at the upcoming IMF and World Bank meetings, where the Federal Reserve's strategy regarding inflation will be under scrutiny. The broader implication warns of limited maneuverability for central banks worldwide if US inflation persists, highlighting the intricate balance required in global fiscal management.
End of Article
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