Team Blitz India
The International Monetary Fund (IMF) has raised India’s GDP growth projection for FY24 by 40 basis points (bps) to 6.7 per cent, and for FY25 by 20 bps to 6.5 per cent, in its latest ‘World Economic Outlook’ report, citing “resilient domestic demand”.
At 6.7 per cent India would remain the fastest growing major economy in the world. However, the forecast for FY24 is still 60 bps lower than the National Statistical Office’s (NSO) projection. Earlier this month, the NSO projected India’s economy to grow at 7.3 per cent in the current fiscal, based on data extrapolated for the first seven to eight months. The IMF’s estimate is also 30 bps lower than the RBI’s estimate of 7.0 per cent for FY24.
On the Fund’s projection, the Finance Ministry said the IMF has revised India’s growth forecast for FY24 to 6.7 per cent from 6.3 per cent on account of the robust second quarter GDP outturn at 7.6 per cent, much higher than market expectations.
Meanwhile, IMF expects the global economy to now grow at 3.1 per cent in 2023, 20 bps higher than its previous forecast on the back of declining inflationary pressures. It however says that the pace of expansion remains slow, and “turbulence” may lie ahead.
“The clouds are beginning to part. The global economy begins the final descent toward a soft landing, with inflation declining steadily and growth holding up,” said Pierre-Olivier Gourinchas, Chief Economist, IMF.
“Global activity proved resilient in the second half of last year, as demand and supply factors supported major economies,” he said. The IMF expects the US’ economy to grow at 2.1 per cent in 2024, 60 bps higher than its previous forecast, and China’s economy at 4.6 per cent, 40 bps above its earlier projection.
