IMF Upgrades India’s FY24-25 GDP Forecast to 7% [Current Affairs]

The International Monetary Fund (IMF) has revised its forecast for India’s GDP growth in FY2024-25 upward to 7%, a 20 basis point increase from the previous estimate of 6.8%. This revision reflects the IMF’s updated World Economic Outlook report, driven by enhanced consumption prospects, particularly in rural areas. India’s economic growth is projected to remain robust, solidifying its position as the fastest-growing major economy among emerging markets.

2024-25 Economic Outlook

The IMF’s upward revision highlights a strong economic trajectory for India, supported by improved private consumption and domestic demand. The Indian economy grew by 8.2% in FY2023-24, surpassing the 7% growth seen in FY2022-23. This growth was further bolstered by a notable 7.8% expansion in the fourth quarter.

RBI’s Role in Economic Stability

The Reserve Bank of India (RBI) plays a crucial role in maintaining economic stability through its monetary policy framework. By managing interest rates and liquidity, the RBI aims to control inflation while fostering sustainable growth, contributing to a resilient financial sector.

Stock Market and Employment Growth

India’s stock market reaching an all-time high reflects investor confidence in long-term growth prospects. Increased economic growth has also led to significant job creation, with over 80 million employment opportunities generated from 2017-18 to 2021-22. This growth underscores the effectiveness of government initiatives aimed at boosting employment.

Impact on Sustainable Development Goals (SDGs)

The upgraded GDP forecast paves the way for progress in Sustainable Development Goals (SDGs). The anticipated growth rates of 7% in 2024 and 6.5% in 2025 offer opportunities for advancing gender equality, decent work, and overall economic development. Enhanced job creation and improved social security measures contribute to a stable and prosperous society, promoting inclusive growth.

IMF’s Future Projections

For FY2025-26, the IMF has maintained its growth forecast for India at 6.5%. The upward revision for FY2024-25 reflects improved private consumption, particularly in rural areas. This adjustment contrasts with reduced forecasts for other economies, including the US, amid a tepid global economic outlook.