IMF keeps India’s GDP growth forecast at 7% for FY25 and 6.5% for FY26

International Monetary Fund (IMF) has confirmed its growth forecasts for India, projecting a GDP growth of 7 per cent for financial year 2024 and 6.5 per cent for FY25. This assessment highlights that pent-up demand accumulated during pandemic has been largely exhausted as economy “reconnects” with its potential. In its latest World Economic Outlook report, IMF stated, “In India, outlook is for gross domestic product (GDP) growth to moderate from 8.2 per cent in 2023 to 7 per cent in 2024 and 6.5 per cent in 2025.” This justment reflects a transition as economy stabilises following post-pandemic surge.

Earlier this month, Reserve Bank of India ( RBI ) also maintained its growth projection for current financial year at 7.2 per cent, attributing this stability to robust consumption and investment momentum.
On a global scale, IMF's growth projections remain largely unchanged from earlier estimates in July, with global growth expected to stabilise at a lacklustre 3.2 per cent for both 2024 and 2025. However, forecast for 2025 has been marginally revised down by 10 basis points from previously projected 3.3 per cent.

report notes significant sectoral and regional shifts driving stable global outlook, particularly ongoing transition from goods to services consumption. Emerging markets like India and China are gaining ground in manufacturing production, which is boosting activity in services sector while dampening manufacturing output in vanced economies. For China, IMF has revised its 2024 growth projection downwards by 20 basis points to 4.8 per cent, while outlook for United States has been raised by 20 basis points to 2.8 per cent. report warns that a prolonged contraction in China's property sector could weaken consumer sentiment and have negative global repercussions, given China's significant role in international tre.

On inflation front, global heline inflation is anticipated to decrease from an average of 6.7 per cent in 2023 to 5.8 per cent in 2024 and furr to 4.3 per cent in 2025. vanced economies are expected to return to ir inflation targets sooner than emerging markets. However, elevated services price inflation remains a concern in many regions, complicating monetary policy decisions. For India, IMF projects a heline inflation rate of 4.4 per cent for FY25 and 4.1 per cent for FY26. report emphasises need for structural reforms to enhance medium-term growth prospects, vocating for early engagement with stakeholders such as tre unions and business associations to ensure social acceptability of se reforms.

outlook cites successful reforms in Indian states like Gujarat and Rajasthan , which have implemented flexible labour laws and skill development initiatives, as potential models for national policy changes.