India to lead global economic race with 6.8% growth: IMF
The International Monetary Fund (IMF) has revised its global growth forecast to 3.2% for 2024, a slight increase from the previous year's projection of 3.1%. This positive outlook is attributed to a growing working-age population and robust domestic demand, especially in India. The IMF anticipates a "soft landing" for the global economy, characterized by steady growth and moderate inflation extending through 2025.
India's GDP growth surpasses China in IMF forecast
In its latest World Economic Outlook, the IMF has increased India's GDP growth forecast for FY25 by 30 basis points to 6.8%, up from its January prediction of 6.5%. This places India as the fastest-growing major economy globally, outpacing China's expected growth of 4.6%. The IMF said, "Growth in India is projected to remain strong at 6.8% in 2024 and 6.5% in 2025, with the robustness reflecting continuing strength in domestic demand and a rising working-age population."
Global inflation and Asian growth predictions
Despite concerns over inflation, the IMF predicts a decrease in global inflation from 6.8% in 2023 to 5.9% in 2024, and further down to 4.5% in 2025. This is attributed to higher interest rates leading advanced economies toward a downward trend. Concurrently, growth in emerging and developing Asia is expected to decline from an estimated 5.6% in 2023 to 5.2% in 2024 and further to 4.9% in 2025.
China's economic growth slows down, says IMF
The IMF projects that China's economic growth will slow from 5.2% in 2023 to 4.6% in 2024 and further down to 4.1% in 2025. This slowdown is attributed to the easing of one-off factors such as post-pandemic consumption boost and fiscal stimulus, along with persistent weakness in the property sector. The IMF has recommended that China expedite the exit of non-viable developers and promote the completion of unfinished housing projects to restore consumer demand.
IMF cautions low-income developing countries
While India and other significant emerging market countries like Brazil show promising growth prospects, the IMF warns that low-income developing countries are still struggling with post-pandemic adjustments. These nations face higher levels of economic "scarring" than middle-income emerging markets. Consequently, their 2024 growth forecast has been reduced to 4.7%, down from an earlier estimate of 4.9% in January.
