The IMF additionally highlighted potential dangers to the worldwide economic system, together with persistent inflation, commerce tensions, and elevated coverage uncertainty.
In Asia, China and India are anticipated to be the principle drivers of progress, with China’s forecast revised upward to five.0% in 2024 resulting from a rebound in non-public consumption and robust exports. Nevertheless, the IMF cautioned that China faces dangers stemming from weak confidence and unresolved property sector issues, which may result in a larger reliance on the exterior sector.
The IMF has revised its progress projection for India’s economic system within the 2024-25 monetary 12 months, growing it from 6.8 per cent to 7 per cent.
The upward adjustment is attributed to the anticipated enchancment in non-public consumption, particularly in rural areas of the nation.
For the 2025-26 fiscal 12 months, the IMF maintained its earlier estimate of 6.5 per cent progress in India’s gross home product (GDP). This projection stays unchanged from the sooner forecast.
In April, the IMF had raised its forecast for India’s GDP progress from 6.5 per cent to six.8 per cent for the 2024-25 monetary 12 months. The present revision additional boosts the expansion outlook, highlighting the resilience and potential of the Indian economic system.
The IMF emphasised the significance of cautious financial coverage changes to deal with the dangers of sticky inflation, which may very well be exacerbated by renewed commerce or geopolitical tensions. Larger inflation may additionally improve the chance of rates of interest remaining elevated for longer, resulting in elevated monetary dangers.
The group warned {that a} resurgence of tariffs may set off retaliation and a “expensive race to the underside.” Moreover, the IMF famous that vital swings in financial coverage ensuing from elections this 12 months may have destructive spillovers to the remainder of the world.
(With inputs from companies)
