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Informist, Tuesday, Oct. 22, 2024

 

--IMF retains India FY25 GDP growth forecast at 7.0%

--CONTEXT: IMF releases World Economic Outlook report

--IMF retains India FY26 GDP growth forecast at 6.5%

--IMF: India growth to fall from FY24 as post-COVID pent-up demand exhausted

--IMF:India growth to fall from FY24 as econ “reconnects with its potential”

--IMF retains global growth forecast for 2024 at 3.2%

--IMF lowers global growth forecast for 2025 by 10 bps to 3.2%

--IMF raises US growth forecast for 2024 by 20 bps to 2.8%

--IMF raises US growth forecast for 2025 by 30 bps to 2.2%

--IMF cuts China growth forecast for 2024 by 20 bps to 4.8%

--IMF retains China growth forecast for 2025 at 4.5%

--IMF: Downside risks to world economy rising, now dominate outlook

--IMF: More needed to improve global growth prospects, lift productivity

--IMF: Medium-term global growth prospects remain lacklustre

 

NEW DELHI – The International Monetary Fund has retained its growth forecast for India for the current and the next financial year at 7.0% and 6.5%, respectively, even as it lowered the global outlook for 2025.

 

"In India, the outlook is for GDP growth to moderate from 8.2% in 2023 (FY24) to 7% in 2024 (FY25) and 6.5% in 2025 (FY26), because pent-up demand accumulated during the pandemic has been exhausted, as the economy reconnects with its potential," the multilateral agency said in its World Economic Outlook report on Tuesday.

 

The IMF's forecast continues to be slightly lower than that of the Reserve Bank of India, which on Oct. 9 retained its own growth projection of 7.2% for 2024-25 (Apr-Mar) despite growth slowing to a five-quarter low of 6.7% in Apr-Jun.

 

While the agency also retained its global growth forecast for 2024 at 3.2%, it lowered the estimate for 2025 by 10 basis points to 3.2%. The US, meanwhile, is now seen growing faster than previously anticipated – 2.8% in 2024 and 2.2% in 2025, up from 2.6% and 1.9%, respectively, forecast in July by the IMF.

 

China, the world's second-largest economy, on the other hand, is expected to grow 4.8% in 2024, down from the 5.0% predicted earlier, while the 4.5% forecast for 2025 has been left unchanged.

 

However, the IMF warned that downside risks to the global economy "are rising and now dominate the outlook". These risks include escalation in regional conflicts, monetary policy remaining tight for too long, a possible resurgence of financial market volatility with adverse effects on sovereign debt markets, a deeper growth slowdown in China, and the continued ratcheting up of protectionist policies.

 

"Faced with increased external competition and structural weaknesses in manufacturing and productivity, many countries are implementing industrial and trade policy measures to protect their workers and industries," the IMF noted, adding that such actions, while helpful in the short run, are unlikely to lead to sustained growth improvements and "should be firmly resisted".

 

"Instead, economic growth must come from ambitious domestic reforms that boost technology and innovation, improve competition and resource allocation, further economic integration, and stimulate productive private investment," the agency said.  End

 

Reported by Siddharth Upasani

Edited by Avishek Dutta

 

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