HomeEconomyIndia EconomyIMF Raises FY24 GDP Growth Forecast To 6.7%, FY25 At 6.5%

IMF Raises FY24 GDP Growth Forecast To 6.7%, FY25 At 6.5%

The IMF raises India's FY25 GDP growth projection to 6.5%, aligning with the 2024-25 Budget as measures to enhance finances loom.

The International Monetary Fund (IMF) has recalibrated India’s economic trajectory with an upward revision of GDP growth projections. For the fiscal year 2025, the IMF now forecasts a growth rate of 6.5 percent, reflecting an increase of 20 basis points. While this adjustment is slightly below the expectations of Indian authorities, it signals a positive outlook for the nation’s economic recovery.

In tandem with the GDP growth projection for FY25, the IMF has also raised its forecast for the fiscal year 2024 by 40 basis points, now standing at 6.7 percent. These revisions come at a crucial juncture as India prepares for the presentation of the 2024-25 interim Budget.

The alignment of the IMF’s upward revision with the impending budgetary presentation suggests a coordinated effort to enhance India’s financial landscape and bolster growth prospects. The Indian finance ministry is expected to unveil measures geared towards achieving these objectives, setting the stage for a comprehensive fiscal strategy.

A recent economist survey conducted by Moneycontrol adds depth to the anticipations surrounding the interim Budget. The survey indicates that Finance Minister Nirmala Sitharaman may set an ambitious target, aiming for a fiscal deficit of 5.3 percent of GDP for the fiscal year 2024-25. Economists participating in the survey also foresee Budget figures assuming a nominal GDP growth of 10.5 percent for the upcoming fiscal year.

Divergence in growth estimates adds nuance to the economic landscape. The statistics ministry’s initial advance estimate for 2023-24 projects robust real GDP growth of 8.9 percent. In contrast, a January 29 report from the finance ministry hints at a more conservative estimate, suggesting the economy’s growth rate might approach 7 percent in the fiscal year 2024-25. This disparity underscores the complexities involved in forecasting economic trajectories.

Beyond GDP growth projections, the IMF’s forecasts shed light on inflation expectations. Consumer prices are anticipated to rise by 5.8 percent in 2024 and 4.4 percent in 2025, following a 6.8 percent increase in 2023. This gradual moderation of inflationary pressures provides insights into the pricing conditions expected in the coming years.

As India navigates the complexities of economic recovery post-pandemic, the recalibrated growth projections offer a beacon of optimism. The anticipation surrounding the interim Budget and the ambitious fiscal targets underscore the concerted efforts to propel India into a trajectory of sustained growth and stability. The nuanced economic scenario, marked by varying growth estimates and inflation outlooks, demands adaptive policy measures to ensure resilience and progress on the path to recovery.

Aryan Jakhar
Aryan Jakhar
Aryan Jakhar is an Indian Journalist with over two years of active working experience. Aryan is currently working as editor-in-chief at BusinessHeadline.in and he is reachable on contact@businessheadline.in
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