The International Monetary Fund (IMF) raised its expectations for India's growth by estimating growth of 6.5 per cent for 2024 and a similar growth for 2025. It revises its October 2023 estimate of 6.3 per cent growth.
Global growth forecast for 2024 is also raised by 0.2 percentage points and is now projected at 3.1 percent as the United States and several large emerging market and developing economies showed "greater-than-expected resilience".
However, the estimate remains below the historical (2000–19) average of 3.8 percent due to elevated central bank policy rates to fight inflation, a withdrawal of fiscal support amid high debt weighing on economic activity, and low underlying productivity growth.
The positive is that inflation is falling faster than expected in most regions, and is expected to fall to 5.8 percent in 2024 and to 4.4 percent in 2025, as the 2025 forecast is revised down.
India remains the fastest-growing economy, followed by China with 4.6 per cent growth. Emerging markets and developing economies are expected to grow at a much higher rate than advanced economies.
"The global economy is poised for a soft landing as inflation steadily declines and growth holds up, but the pace of expansion remains slow and the potential for turbulence remains," IMF notes.
"Mounting geoeconomic fragmentation is hurting global trade. Lowering trade barriers, including those that impede flows of low-carbon technologies, could strengthen economic growth," it further observes.
Nishtha Anushree is Senior Sub-editor at Swarajya. She tweets at @nishthaanushree.
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