The International Monetary Fund (IMF), on Tuesday, raised India's growth projection to 6.8 per cent from its January forecast of 6.5 per cent. The IMF cited bullish domestic demand conditions and a rising working-age population as the reasons for the revised growth projection.
"Growth in India is projected to remain strong at 6.8 per cent in 2024 and 6.5 per cent in 2025, with the robustness reflecting continuing strength in domestic demand and a rising working-age population," according to the latest edition of IMF's World Economic Outlook.
This is ahead of China's growth projection of 4.6 per cent during the same period. "Growth in China is projected to slow from 5.2 per cent in 2023 to 4.6 per cent in 2024 and 4.1 per cent 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 persists," the IMF said.
Meanwhile, according to IMF, growth in emerging and developing Asia is expected to fall from an estimated 5.6 per cent in 2023 to 5.2 per cent in 2024 and 4.9 per cent in 2025.
"Growth in China is projected to slow from 5.2 per cent in 2023 to 4.6 per cent in 2024 and 4.1 per cent 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 persists."
Global growth, estimated at 3.2 per cent in 2023, is projected to continue at the same pace in 2024 and 2025.
Policymakers should prioritise steps toward greater economic resilience such as strengthening government finances and revitalising economic growth prospects, said Pierre-Olivier Gourinchas, chief economist of the IMF.
"Despite gloomy predictions, the global economy remains remarkably resilient, with steady growth and inflation slowing almost as quickly as it rose. The journey has been eventful, starting with supply-chain disruptions in the aftermath of the pandemic, an energy and food crisis triggered by Russia's war on Ukraine, a considerable surge in inflation, followed by a globally synchronized monetary policy tightening," he said.
According to Gourinchas, global growth bottomed out at the end of 2022, at 2.3 per cent, after median headline inflation peaked at 9.4 per cent.
Growth this year and next will hold steady at 3.2 per cent, with median headline inflation declining from 2.8 per cent at the end of 2024 to 2.4 per cent at the end of 2025.
"We also project less economic scarring from the crises of the past four years, although estimates vary across countries. The US economy has already surged past its pre-pandemic trend. But we now estimate that there will be more scarring for low-income developing countries, many of which are still struggling to turn the page from the pandemic and cost-of-living crises," he said.
—With PTI inputs
