India's economy had recorded 7.2% GDP growth in FY23, lower than 9.1% in FY22. Image: Getty Images
The International Monetary Fund (IMF) has commended India for its strong economic performance, as stated in its April 2024 World Economic Outlook (WEO) report. According to Krishna Srinivasan, the Director of the Asia and Pacific Department at the IMF, India's macro fundamentals are in good shape, and the overall state of the country's economy is very positive.
Srinivasan emphasized the significance of India's 6.8% growth rate and decreasing inflation, while also highlighting the importance of sustaining low inflation levels. During a press conference on the Regional Economic Outlook for Asia and Pacific, Srinivasan noted that India, along with other emerging Asian economies like Malaysia, the Philippines, and Vietnam, experienced significant positive growth surprises due to robust domestic demand.
The IMF has revised India's economic growth forecast to 6.8% for 2024-25 and 6.5% for 2025-26, higher than its previous estimate of 6.7% for 2024. The IMF attributed the strength of India's economy to strong domestic demand and a growing working-age population.
In contrast, the IMF expects growth in emerging and developing Asia to decline slightly from 5.6% in 2023 to 5.2% in 2024 and 4.9% in 2025. The IMF also projected a slowdown in China's growth from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025 due to factors such as the easing of post-pandemic consumption and fiscal stimulus and weakness in the property sector.
The IMF provided growth forecasts for various major economies, including the United States, Germany, France, Italy, Spain, the United Kingdom, Japan, China, Russia, Brazil, Mexico, Saudi Arabia, Nigeria, and South Africa.
Additionally, the Indian government's second advance estimates indicated a real GDP growth of 7.6% for 2023-24, marking the third consecutive year of growth at 7% or higher. However, the Reserve Bank of India (RBI) cautioned that geopolitical tensions and disruptions in trade routes pose risks to the overall economic outlook. The RBI projected a real GDP growth rate of 7% for the current financial year of 2024-25
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