The International Monetary Fund (IMF) on Tuesday raised its growth projection for India’s GDP in the current fiscal year 2024/25 to 6.8%, and forecast a 6.5% expansion next year
The projected moderation in India’s growth rate from 7.8% last fiscal year was due to a tightening in monetary and fiscal policy, necessary to bring inflation down
Inflation was projected to be 4.6% this year and 4.2% next year
Growth could end up higher than expected due to strengthening private demand
Also, an upside comes from the potential for reforms that would liberalise foreign investment and really boost exports and boost jobs and labour force participation
The global economy had remained “remarkably resilient” with steady growth and inflation returning to target and had “defied expectations of stagflation and global recession” in the wake of the post-pandemic supply disruptions, Russia’s invasion of Ukraine and subsequent global energy and food crises as well as the monetary tightening across economies
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