The International Monetary Fund (IMF), which recently released its World Economic Outlook (WEO) for April 2024, has again applauded India for “strong economic numbers” after it projected the country's economy to grow at the fastest pace.
Krishna Srinivasan, Director, Asia and Pacific Department, IMF has said that India's macro fundamentals look “pretty good” and that overall, the country's economy is doing very well. "Growth at 6.8% is very good. Inflation's coming down. We have to make sure that inflation comes down to the target and it is there on a durable basis," Srinivasan told a national news agency during an interview.
During the opening remarks at the press conference on the Regional Economic Outlook for Asia and Pacific in Washington, DC on April 18, 2024, he said that growth surprised with the upside in the second half of 2023, as robust domestic demand fuelled activity especially in emerging Asian economies. "Malaysia, the Philippines, Vietnam, and, most notably, India recorded sizeable positive growth surprises," he said.
In this fiscal year, Srinivasan said in China and India, the IMF expects investment to contribute disproportionately to growth — much of it public, especially in India. "In Emerging Asia outside China and India, robust private consumption will remain the main growth engine."
The IMF has raised India's economic growth forecast to 6.8% in 2024-25 and 6.5% in 2025-26. The IMF’s growth projections are up from its previous forecast of 6.7% for 2024.
The "robustness" of the Indian economy reflects "continuing strength" in domestic demand and a rising working-age population, said the Washington, D.C.-based global financial agency.
Growth in emerging and developing Asia is expected to fall from an estimated 5.6% in 2023 to 5.2% in 2024 and 4.9% in 2025, a slight upward revision compared with the January 2024 WEO update of the IMF.
About China, the IMF says the country's growth is projected to slow from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025 as the positive effects of one-off factors –– including the post-pandemic boost to consumption and fiscal stimulus –– ease and weakness in the property sector persist.
Among major economies, the IMF's latest growth forecast for 2024 estimated the US economy to grow at 2.7%, Germany 0.2%, France 0.7%, Italy 0.7%, Spain 1.9%, UK 0.5%, Japan 0.9%, the UK 0.5%, Japan 0.9%, China 4.6%, Russia 3.2%, Brazil 2.2%, Mexico 2.4%, KSA 2.6%, Nigeria 3.3% and South Africa 0.9%.
Notably, the government's second advance estimates have placed the real GDP growth at 7.6% for 2023-24, the third successive year of 7% or higher growth. The RBI, in its latest note, said the headwinds from protracted geopolitical tensions and increasing disruptions in trade routes pose risks to the overall outlook. "The real GDP growth for the current financial year 2024-25 is projected at 7%," the central bank said this month.
