The International Monetary Fund (IMF) has revised its economic growth forecast for India to 7% in 2024, up from its previous estimate of 6.8% in April.
The boost is largely due to increased individual spending, particularly in rural areas, contributing to brighter economic prospects for the country.
However, the IMF report notes a slight decline from the 8.2% growth seen in the financial year of April 2023 to March 2024. Experts attribute the projected future decline to global economic instability and domestic policy changes.
Measures including tax cuts and infrastructure investment are being undertaken to stimulate the economy, potentially leading to a 6.5% growth by 2025.
The promising economic performance and technological advancements have positioned India as one of Asia’s leading emerging market economies.
While India’s prosperity attracts global investment, overall international economic growth is projected to be modest in the next five years, — a viewpoint shared by IMF economist Pierre-Olivier Gourinchas.
In contrast, China’s economy is projected to expand at 5% this year, with a forecasted gradual slow down to 4.5% by 2025, eventually stabilizing at around 3.3% by 2029.
India’s economic growth rate, however, is set to rebound to 7.3% in 2022, a significant uptick from the 5.8% growth of the previous year.
India’s forecasted growth: IMF’s 2024 prediction
By 2025, India’s GDP growth rate is expected to stabilize at around 6.1%.
Economic growth in the region has been positively impacted by increases in consumer activities and a boost in exports earlier this year. However, there are concerns over potential disruptions in the Chinese market, as highlighted by Gourinchas.
