IMF raises growth projection for FY25 to 7%
STORIES, ANALYSES, EXPERT VIEWS
The International Monetary Fund (IMF) raised India’s growth projection for FY25 by 20 basis points to 7% citing ‘improved prospects’ for private consumption, particularly in rural areas. The UN body expects gross domestic product (GDP) growth in FY26 to slow down to 6.5%, same as projected in its April World Economic Outlook (WEO).
“The forecast for growth in India has also been revised upward, to 7%, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas,” it said in an update to the WEO.
On a calendar-year basis, India’s growth projections are 7.3% in 2024 and 6.5% in 2025.
IMF chief economist Pierre-Olivier Gourinchas in a blog post said, “Growth in India and China is revised upwards and accounts for almost half of global growth. Yet prospects for the next five years remain weak, largely because of waning momentum in emerging Asia.”
RBI projection at 7.2%: Recently, the Reserve Bank of India (RBI) has projected the economy will grow at 7.2% in FY25. Governor Shaktikanta Das said India is at the threshold of a major structural shift in its growth trajectory.
ADB retains GDP growth forecast at 7%: The Asian Development Bank (ADB) Wednesday retained India’s GDP growth forecast for the current financial year at 7%, as it expects the industry sector to “grow robustly” driven by manufacturing and construction activity. The ADB’s projection is the same as that of the International Monetary Fund (IMF), which raised the country’s growth projection to 7% from 6.8% earlier.
