In exciting news for India, the International Monetary Fund (IMF) has raised its prediction for the country’s economic growth in 2024. Now, the IMF estimates that India’s economy will expand by 6.8%, up from the previous forecast of 6.5%. This improvement comes as a result of strong demand within the country and a growing working-age population.
India’s growth projection surpasses that of China, which is expected to grow by 4.6% in the same period. This means India maintains its position as the fastest-growing economy globally.
Looking ahead, the IMF expects India’s growth to remain robust, with projections of 6.8% for 2024 and 6.5% for 2025. This positive outlook is attributed to continued strong domestic demand and the increasing number of people of working age.
However, while India’s prospects are bright, there are concerns about the broader economic landscape in Asia. The IMF projects a decline in growth for emerging and developing Asian countries, from 5.6% in 2023 to 5.2% in 2024 and 4.9% in 2025. This revision is slightly higher than previous estimates.
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China, the world’s second-largest economy, is also expected to experience slower growth, dropping from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025. This decline is attributed to various factors, including reduced stimulus measures and ongoing weaknesses in the property sector.
Globally, the IMF anticipates stable growth rates of 3.2% for both 2024 and 2025. However, policymakers are urged to focus on enhancing economic resilience by strengthening government finances and fostering economic growth.
According to Pierre-Olivier Gourinchas, the IMF’s chief economist, the global economy hit a low point in 2022 but is now stabilizing. While some countries, like the US, have recovered well from the pandemic, others, particularly low-income developing nations, continue to face challenges.
Gourinchas also highlights concerns about China’s property sector and the need for robust measures to stimulate domestic demand. Without such measures, there could be increased trade tensions, adding to the geopolitical uncertainties already present.
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In summary, India’s upgraded growth forecast is a positive sign for the economy, but challenges remain both domestically and globally. Policymakers must take proactive steps to ensure sustained economic growth and stability in the years to come.
