IMF Raises India’s GDP Growth Projection by 30 Bps to 6.8 Percent For FY25

With these projections, India is poised to retain its status as the fastest-growing major economy in the world. 

New Delhi: The International Monetary Fund (IMF) has revised upwards its growth projections for the Indian economy in its latest World Economic Outlook report. The multilateral agency now expects India’s real GDP to grow by 6.8% in 2024, up from its previous estimate of 6.6%. For 2025, the growth projection has been set at 6.5%.

India’s Economic Resilience

This upward revision comes on the back of India’s robust economic performance in 2023, when the country’s GDP grew by an impressive 7.8%. India’s economy has demonstrated remarkable resilience, bouncing back strongly from the COVID-19 pandemic and navigating global economic uncertainties with relative ease.

The IMF’s revised projections reflect growing confidence in India’s economic fundamentals and its ability to sustain a high growth trajectory. India’s domestic demand, fueled by a burgeoning middle class and increased infrastructure spending, has been a key driver of this growth momentum.

Fastest-Growing Major Economy

With these projections, India is poised to retain its status as the fastest-growing major economy in the world. The country’s economic expansion is expected to outpace other major economies, including China, which is grappling with challenges in its real estate sector and subdued consumer confidence.

“India’s economic achievement is a record of the fastest-growing major economy,” noted a recent report by CLSA, a foreign broking major. The report predicts that India could surpass the United States to become the world’s largest economy by 2052, with a nominal GDP of $45 trillion.

India’s Challenges and Opportunities

While the growth projections are encouraging, India faces several challenges that need to be addressed. Inflationary pressures, driven by rising food and energy prices, remain a concern. The Reserve Bank of India (RBI) has been proactive in managing inflation through monetary policy measures.

Additionally, job creation and improving the quality of employment opportunities are crucial for sustaining India’s economic momentum. The McKinsey Global Institute emphasises the need for India to boost its rate of employment growth, aiming to create 90 million non-farm jobs between 2023 and 2030.

Nonetheless, India’s appeal as a destination for investments has grown stronger, as evidenced by the record amounts of money raised by India-focused funds in 2022.

The government’s push for infrastructure development, digitalization, and ease of doing business reforms have contributed to this positive sentiment.

As India cements its position as a global economic powerhouse, the world is watching with keen interest. The country’s ability to navigate the challenges and capitalise on its strengths will shape its future growth trajectory and its aspirations to become a high-income economy by 2047.