IMF Retains India’s GDP Growth Forecast At 7% For FY25, 6.5% For FY26

On Tuesday, the International Monetary Fund (IMF) maintained its growth forecasts for India at 7 percent for FY25 and 6.5 percent for FY26. It noted that the pent-up demand from the pandemic has been fully utilized, and the economy is now aligning with its potential growth.

The IMF’s World Economic Outlook report stated that India’s GDP growth is expected to decrease from 8.2 percent in 2023 to 7 percent in 2024 and 6.5 percent in 2025, as the economy stabilizes after the surge in demand during the pandemic.

Earlier this month, the Reserve Bank of India (RBI) also held its growth projection for the current financial year steady at 7.2 percent, citing strong consumer spending and investment.

On a global scale, the IMF’s latest growth outlook shows little change from previous forecasts made in July, predicting a steady yet modest growth rate of 3.2 percent for 2024 and 2025. The 2025 forecast has been slightly downgraded by 10 basis points from the earlier estimate of 3.3 percent.

The IMF highlighted significant shifts in various sectors and regions that contribute to the stable global outlook. Goods prices remain high compared to services, reflecting ongoing effects from the pandemic. Additionally, there is a notable shift from goods to services consumption, with emerging markets like India and China seeing growth in manufacturing production.