The International Monetary Fund (IMF) has raised its GDP growth forecast for India for FY2024-25 to 7%, up from the previous estimate of 6.8%. This upgrade is attributed to stronger private consumption, particularly in rural areas, as reflected in the IMF’s latest World Economic Outlook report. India’s economy, which grew by 8.2% in FY2023-24, is set to continue its robust performance, with a projected growth of 6.5% in FY2025-26.
Economic Growth Outlook for FY2024-25
The IMF’s revised forecast highlights India’s strong economic trajectory, bolstered by increased private consumption and domestic demand. The Indian economy outperformed expectations with an 8.2% growth in FY2023-24, surpassing the 7% growth achieved in FY2022-23. Notably, the economy expanded by 7.8% in the fourth quarter, signaling sustained momentum.
RBI’s Role in Economic Stability
The Reserve Bank of India (RBI) is crucial in maintaining economic stability through its monetary policy. By managing interest rates and liquidity, the RBI aims to control inflation while supporting sustainable growth, contributing to a stable financial sector.
Stock Market and Employment Growth
India’s stock market has reached an all-time high, reflecting investor confidence in the country’s growth prospects. Economic expansion has led to significant job creation, with over 80 million new employment opportunities generated between 2017-18 and 2021-22. This underscores the success of government initiatives aimed at enhancing employment.
Impact on Sustainable Development Goals (SDGs)
The upgraded GDP forecast supports progress towards Sustainable Development Goals (SDGs). The anticipated growth rates of 7% in FY2024 and 6.5% in FY2025 provide opportunities for advancing gender equality, decent work, and overall economic development. Increased job creation and improved social security measures contribute to inclusive growth and societal stability.
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, especially in rural areas, contrasting with reduced growth forecasts for other economies, including the US, due to a sluggish global economic outlook.
The IMF upgraded India’s GDP forecast due to stronger private consumption and improved domestic demand.
India’s GDP grew by 8.2% in FY2023-24.
The RBI manages interest rates and liquidity to control inflation and support sustainable economic growth.
The stock market has reached an all-time high, reflecting investor confidence in India’s economic prospects.
The IMF forecasts a 6.5% growth rate for India in FY2025-26.
