The International Monetary Fund (IMF) raised India’s growth projection for the current fiscal year to 6.3%, from 6.1% estimated earlier, on the back of a stronger than expected consumption during the June quarter.
The current growth forecast, which is closer to the 6.5% estimate made by the RBI, will help India maintain its position as the fastest-growing major economy in the world at a time when expectations for China are lower. In contrast to an earlier forecast of 5.2%, China is predicted to grow by 5% this year. The world economy is predicted to develop by 3% this year and 2.9% next year, which is 0.1% slower than the earlier prediction.
“The global economy is limping along, not sprinting… growth is well below historical averages,” Pierre Olivier Gourinchas, IMF’s chief economist, said after releasing the latest World Economic Outlook (WEO). The outlook does not factor in the implications of the conflict in Israel, which is being watched closely.
Asked about India’s growth and inflation projections, which have been revised upwards from 4.9% to 5.5%, the IMF chief economist said, “India is one of the large emerging markets doing better than expected, it’s been doing better for a while. It is one of the growth engines in the world economy. We are revising growth for fiscal year to 6.3%, but not changing next year’s projections. That’s a robust growth number, although there is a little bit of slowdown from last year. Inflation is also pushing up in India. Some of this is related to increased food prices in the country.” The Indian economy is projected to expand 6.3% in 2024-25 , according to the IMF's forecast.