The IMF in its latest World Economic Outlook has revised upward India's growth forecasts, projecting a 6.5% expansion for the upcoming financial year and 6.7% for the current fiscal year ending in March. These figures, while optimistic, fall short of the government's projections. Nevertheless, India is poised to maintain its status as the fastest-growing major economy.
“India is one of the emerging market economies that is doing better… The upward revision is on account of strong growth, driven by a spending push. The difference (with the government estimate) is on account of a second half growth slowdown,” IMF chief economist Pierre-Olivier Gourinchas said. The WEO said that growth reflected the resilience in domestic demand.
The official estimates for the current fiscal year indicate a GDP growth of 7.3%, with the finance ministry anticipating a further expansion of over 7% in the following year. Initially, the IMF had forecasted a GDP growth of 6% for the current fiscal year, which was revised up to 6.3% in October prior to the latest update.
Forecast for the global economy is also better than earlier, with growth projected at 3.1% in 2024, 0.2 percentage point higher than October due to more resilience in the US and several developing countries, as well as fiscal support in China.
“The clouds are beginning to part. The global economy begins the final descent towards a soft landing, with inflation declining steadily and growth holding up. But the pace of expansion remains slow, and turbulence may lie ahead,” IMF chief economist wrote in a blog.