By Reena Bhardwaj
Washington, DC [US], October 23 : The International Monetary Fund on Tuesday retained its growth rate projects for India in its latest World Economic Outlook (WEO) and expected India to grow at 7 per cent in the current fiscal year ending March 31, 2025 and 6.5 per cent in the next fiscal year (FY2025-26).
"In India, the outlook is for GDP growth to moderate from 8.2 per cent in 2023 to 7 per cent in 2024 and 6.5 per cent in 2025, because pent-up demand accumulated during the pandemic has been exhausted, as the economy reconnects with its potential," the IMF said in the World Economic Outlook.
Looking beyond the one-year outlook, the global economy faces a feeble period of medium-term growth, the IMF said as it called for a slate of reforms in its latest WEO during the annual meetings of the fund and the World Bank in Washington.
The IMF in its update raised the growth rate for the US in 2024 while holding overall global growth steady. For the US, the forecast for growth this year was increased to 2.8 per cent from 2.6 per cent in its July estimate while also raising the 2025 projection to 2.2 per cent from 1.9 per cent. Global growth remained at 3.2 per cent this year and next. The growth rate for China was reduced to 4.8 per cent from 5 per cent previously but remained unchanged at 4.5 per cent for 2025.
The outlook from the Washington-based organization of 190 countries was a mixed bag for the global economy with optimism on inflation but warnings over debt levels and increasing geopolitical and trade volatility. In particular, the IMF said continued tensions in the Mideast threaten commodity prices and overall trade in the region.
"It looks like the global battle against inflation has largely been won, even if price pressures persist in some countries," IMF chief economist Pierre-Olivier Gourinchas said.
"Strong growth forecast has come along with progress on inflation" in the US, Gourinchas said. "There is strong productivity growth when we look at the US."