The International Monetary Fund (IMF) has revised India’s GDP growth forecast for the fiscal year 2024-25 upwards by 20 basis points to 7%, citing increased private consumption, especially in rural areas. The latest update to the IMF’s World Economic Outlook (WEO) highlights that this upward revision builds on improvements observed in 2023.

In the subsequent fiscal year 2025-26, the IMF anticipates a slight moderation in growth to 6.5%, aligning with its previous projections from the April WEO report.

India’s GDP expanded by 8.2% in 2023-24, surpassing the 7% growth recorded in 2022-23. This growth was bolstered by a robust 7.8% expansion in the fourth quarter, according to provisional estimates from the National Statistical Office (NSO).

Earlier, the Reserve Bank of India (RBI) had projected a 7.2% growth rate for FY25. RBI Governor Shaktikanta Das noted India’s progress towards a significant structural shift in its growth trajectory, expressing confidence in sustaining an 8% annual GDP growth rate over the long term.

Meanwhile, the IMF has also raised China’s growth forecast for 2024 by 40 basis points to 5%, driven by a rebound in private consumption and strong export performance in the first quarter. For the calendar year, IMF projects India’s growth rates at 7.3% in 2024 and 6.5% in 2025.

The IMF’s Chief Economist emphasized that Asia’s emerging markets, particularly India and China, continue to drive global economic growth. However, he cautioned that the momentum in emerging Asia is showing signs of weakening over the next five years.

Globally, the IMF’s growth projections remain unchanged at 3.2% for 2024, with a slight increase to 3.3% in 2025. The organization expects global inflation to decelerate to 5.9% in 2024 from the previous year’s 6.7%, indicating a gradual stabilization despite lingering pressures from energy and food prices.