The International Monetary Fund (IMF) on Tuesday maintained its projection for India’s GDP growth at 7% for the current fiscal year ending March 31, 2025. The latest estimates, published in the IMF’s World Economic Outlook (WEO), also forecast India’s growth rate to moderate to 6.5% in the fiscal year 2025-26.

“In India, the outlook is for GDP growth to moderate from 8.2 per cent in 2023 to 7 per cent in 2024 and 6.5 per cent in 2025, because pent-up demand accumulated during the pandemic has been exhausted, as the economy reconnects with its potential,” the IMF said in the World Economic Outlook.

Beyond the short-term outlook, the global economy faces a period of weaker medium-term growth. The IMF called for reforms during its annual meetings with the World Bank in Washington, highlighting key areas of concern.

The report also updated the forecast for the US, raising its 2024 growth estimate to 2.8%, up from the previous forecast of 2.6%, and its 2025 projection to 2.2%, compared to the July estimate of 1.9%. Global growth remains steady at 3.2% for both 2024 and 2025. However, China’s growth outlook for 2024 was lowered to 4.8% from 5%, with no change to the 2025 projection of 4.5%.

The outlook from the Washington-based organization of 190 countries was a mixed bag for the global economy with optimism on inflation but warnings over debt levels and increasing geopolitical and trade volatility. In particular, the IMF said continued tensions in the Mideast threaten commodity prices and overall trade in the region.

“It looks like the global battle against inflation has largely been won, even if price pressures persist in some countries,” IMF chief economist Pierre-Olivier Gourinchas said.

“Strong growth forecast has come along with progress on inflation” in the US, Gourinchas said. “There is strong productivity growth when we look at the US.”

(ANI)