India's Economy Surges as IMF Boosts Growth Forecast

The International Monetary Fund (IMF) has increased India's economic growth rate (GDP) estimate by 30 basis points for the financial year 2025. With this, the estimate of GDP has been increased from 6.5 percent to 6.8 percent.

Accordingly, India remains the fastest growing economy in the world. This change has been made by the IMF while updating the World Economic Outlook (WEO). 

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IMF estimates China's economic growth rate at 4.6 percent, as indicated in the recent World Economic Outlook. Meanwhile, India's growth is projected to be 6.8 percent in 2024 and 6.5 percent in 2025, supported by robust domestic demand and a growing working-age population, according to the same report.

The IMF has revised India's GDP growth rate estimate for the fiscal year 2025 upward by 30 basis points, from 6.5 percent to 6.8 percent, making it the fastest-growing economy globally. This adjustment was made in the updated World Economic Outlook (WEO) in response to strong domestic demand. However, the IMF's forecast falls short of the government's 7 percent estimate.

During the same period, the growth rate of China's economy is anticipated to be 4.6 percent. This assessment precedes the annual meeting of the Monetary Fund and the World Bank.

The report anticipates a decline in the growth rate of emerging and developing Asia from 5.6 percent last year to 5.2 percent in 2024 and 4.9 percent in 2025, an improvement from the previous January estimate. In contrast, IMF predicts a slowdown in China's growth to 4.6 percent in 2024 and 4.1 percent in 2025, down from 5.2 percent in 2023.

The deceleration in growth is attributed to increased consumption post-pandemic, reduced fiscal stimulus impact, and a slowdown in real estate. Despite this, global growth is expected to remain steady in 2024 and 2025, with a projected growth of 3.2 percent in 2023. 

IMF Chief Economist Pierre-Olivier Gourinchas noted that while the global economy remains robust, low-income developing countries are likely to face the most significant challenges due to ongoing pandemic recovery efforts and rising living costs.

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