New Delhi: Indian economy is expected to grow at a strong 7 percent in the FY: 2024-25, as per the latest based World Economic Outlook by International Monetary Fund (IMF). The above optimism is informed by the IMF reiteration of its growth projection to July in which it raised the growth estimate by 0.2% from that given in April.
The IMF added that India has been experiencing outstanding overall economic growth and highlighted that the India’s financial year GDP growth is 8.2% in 2023-24 and will decline to 7% & 6.5 in 2024-25&2025-26 respectively. They blames it of the decline of the so-called ‘reopening effect’ that let the economy to grow higher than potential levels after the pandemic.
Global Economy also faces slow growth The global economy also faces slow growth as the following information will reveal.
According to the IMF, the world economy is expected to grow by approximately 3.2% in 2024 due to the current issues in the globe economy. As IMF stated, India continues to be one of the best performers worldwide; the growth rates in India are still higher than those in most other large economies.
Both the RBI and the World Bank have also kept their growth estimates for India at 7 per cent for the current fiscal. These estimates have highlighted the fact that Indian economy is quite robust to face the global headwinds such as rising inflation and geo-political risks.
Inflation Projections and External Challenges
From the inflation control side, the aspect indicated in the IMF’s outlook shows a world inflation rates will decline at a rate of 5.8% in 2024 down from 6.7% in 2023. Inflation is preferably expected to go down thus for India; 4.4 % for 2024- 2025 and 4.1 % for 2025-2026. The report also indicates that while goods price has been relatively lows, service price inflation has remained comparatively high in many regions.
The IMF warned that high international tension in particular the recent increase in the prices of commodities threatens to stall rate cuts by central banks. This may pose a problem to fiscals and monetary stability in a number of nations, which may cut down on recovery pace in some parts of the world.
Sound Basic Metrics, Yet Global Issues Resurface
Indeed the growth picture looks bright in India compared to other developed markets in the present global economy but the IMF foresees some issues. The possibility of the slow passing of times for interest rate cutting because of increasing inflations in commodities might be a problem to the achievement of financial stability. But, today the consistent growth is yet another factor that contributes to global economic performance, and India’s performance for the coming few years is likely to be strong.
With the growth rate of the Indian economy lowering due to the pandemic effects, such optimistic predictions are indicative of economy stability in India. There is optimism in the growth projections for more investment and development in the future as inflation is also estimate to ease as global supply chain normalize.
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