IMF raises global growth forecast for 2024; India expected to grow 6.8% in FY25

The International Monetary Fund slightly raised its outlook for global growth this year to 3.2 per cent, according to the latest World Economic Outlook (WEO) report published Tuesday (Apr 16). Meanwhile, India, according to the WEO report, is expected to grow at6.8 per cent in 2024.

About the global growth estimates

The IMF has predicted that the global economy is set for another year of slow but steady growth, with a real GDP growth of 3.2 per cent for 2024 and 2025. “We find that the global economy remains quite resilient,” IMF’s chief economist, Pierre-Olivier Gourinchas told reporters.

Add WION as a Preferred Source

He has attributed this resilience to several countries defying the gloomy predictions of recession as central banks hiked interest rates in a bid to combat inflation.

Also Read |‘Will use weapons never used before’: Iran issues threat as Israel mulls over retaliation

The United States-based organisation also noted that several countries are showing less “scarring” after the COVID-19 pandemic and the cost-of-living-crises and reached pre-pandemic level of output quicker than previously predicted.

However, the IMF has also warned about high borrowing costs and the withdrawal of fiscal support which could affect short-term growth. Additionally, the medium-term outlook has remained the weakest in decades due to low productivity and global trade tensions.

US and other countries

The global outlook has been raised by 0.1 per cent from the previous estimate in January with the United States being a major driver of growth this year. However, the lingering high inflation could pose a risk to this forecast, according to the report.

The growth predicted for the US economy was raised to 2.7 per cent in 2024, which is 0.6 per cent higher than the previous forecast. This rise has been attributed to stronger-than-expected employment and consumer spending at the end of 2023.

Gourinchas, in the foreword of the report, said that the US has surged past its pre-pandemic growth trend.

Meanwhile, things are not looking good for the eurozone as its growth forecast was lowered from 0.9 per cent to 0.8 per cent, due to weak consumer sentiment in France and Germany, said the IMF report.

Surprisingly, Russia’s 2024 growth forecast was increased to 3.2 per cent from its previous prediction of 2.6 per cent. The growth has partly been attributed to strong oil export revenues and high consumer spending.

Also Read |Tesla to lay off around 14,000 employees globally as sales decline

The growth predicted for China remained unchanged at 4.6 per cent for 2024, lower than its 5.2 per centlast year. IMFalso warned that the lack of action for the country’s troubled property sector could prolong a downturn and worsen Beijing’s outlook.

India’s growth forecast raised

The IMF raised the growth forecast for India to 6.8 per cent for 2024 which is up from the 6.5 per cent it had predicted in its previous update published in January.

However, the growth outlook for 2025 (FY26) remained unchanged at 6.5 per cent in both reports.

“Growth in India is projected to remain strong at 6.8 per cent in 2024 (FY25) and 6.5 per cent in 2025 (FY26), with the robustness reflecting continuing strength in domestic demand and a rising working-age population,” said the IMF in its report.

(With inputs from agencies)