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

“In India, the outlook is that GDP growth is expected to moderate from 8.2 percent in 2023 to 7 percent in 2024 and 6.5 percent in 2025, as pent-up demand built up during the pandemic has been exhausted, as the economy recovers. potential,” the IMF said in the World Economic Outlook.

Global growth remains stable at 3.2 percent for 2024 and 2025.

The report also updated forecasts for the United States, increasing its growth estimate for 2024 to 2.8 percent, up from the previous forecast of 2.6 percent, and its projection for 2025 to 2.2 percent, compared to the July estimate of 1.9 percent.

However, China’s growth outlook for 2024 was lowered from 5 to 4.8 percent, unchanged from the 4.5 percent projection for 2025.

“A deeper or longer-than-expected contraction in China’s real estate sector, especially if it leads to financial instability, could weaken consumer confidence. This could generate negative spillovers globally, given China’s large footprint in global trade,” the outlook notes.

The outlook from the 190-nation Washington-based organization was mixed for the global economy, with optimism on inflation but warnings on debt levels and growing geopolitical and trade volatility.

The outlook indicates that global headline inflation is expected to decline from an annual average of 6.7 percent in 2023 to 5.8 percent in 2024 and 4.3 percent in 2025 as advanced economies return to their inflation targets. inflation earlier than emerging markets and developing economies.

In particular, the IMF said that ongoing tensions in the Middle East threaten commodity prices and general trade in the region.

“Further disruptions to the disinflation process, potentially triggered by further surges in commodity prices amid persistent geopolitical tensions, could prevent central banks from easing monetary policy. This would pose significant challenges to fiscal policy and financial stability,” the outlook adds.

“It appears that the global battle against inflation has largely been won, although price pressures persist in some countries,” said Pierre-Olivier Gourinchas, the IMF’s chief economist.

For India, the October outlook forecasts an overall inflation rate of 4.4 percent in fiscal year (FY)25 and 4.1 percent in fiscal year (FY)26.

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