Economic Outlook
IMF raises India GDP growth forecast for FY25 by 20 bps to 7.0%
This story was originally published at 19:32 IST on 16 July 2024
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--IMF raises India FY25 GDP growth forecast by 20 bps to 7.0%
--IMF retains India FY26 GDP growth forecast of 6.5%
--IMF:Raised India FY25 growth view on better pvt consumption outlook
NEW DELHI – The International Monetary Fund has raised its forecast for India's GDP growth in the current financial year started Apr 1 by 20 basis points to 7.0% on the back of improved prospects for private consumption, especially in rural areas. The Indian economy grew 8.2% in 2023-24 (Apr-Mar) and is expected to grow at 6.5% during 2025-26, the IMF said in its July edition of the World Economic Outlook report released today.
The hike in projection for India's GDP growth in 2024-25 also reflects a carryover from upward revisions to growth in 2023, the report said.
Despite the upward revision, the IMF's GDP growth forecasts for India in the current financial year and in 2025-26 are lower than the Reserve Bank of India's estimate of 7.2% for 2024-25 and 7.0% for 2025-26.
The World Bank in a report last month said that private consumption is expected to recover this year because of a recovery in agricultural production and declining inflation. In 2023-24, private final consumption expenditure--an indicator of investments in goods and services for individual use, grew just 4.0%. This growth was the slowest in the last two decades excluding the pandemic year. India's GDP growth in recent years has been driven by government-led investment.
The multilateral agency had in April projected CPI inflation to ease to 4.6% this fiscal from 5.4% in 2023-24. For 2025-26, it sees CPI inflation at 4.2%. The IMF's inflation projections are higher than the RBI's. The central bank sees CPI inflation at 4.5% in 2024-25 and 4.1% next fiscal. End
Reported by Priyasmita Dutta
Edited by Tanima Banerjee
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