India’s growth steady at 7%, Outpacing global peers: IMF

The International Monetary Fund (IMF) has reaffirmed its positive outlook for India’s economic growth, maintaining a strong forecast of 7% for FY25, as part of its latest "World Economic Outlook" report. The forecast also predicts a slight moderation to 6.5% in FY26, underscoring India’s resilience amidst global economic challenges.This updated projection reflects a 0.2 percentage point increase from the IMF's earlier estimate in April, signaling growing confidence in India's medium-term growth prospects, despite ongoing global headwinds.
India’s strong growth outlook comes as the global economy faces multiple headwinds, including inflationary pressures, geopolitical tensions, and supply chain disruptions. The IMF’s report signals that India, along with Russia, was a key contributor to the upward revision among emerging markets and developing economies.This strengthens India's position as a leading contributor to global economic growth.
The IMF’s forecast marks India as one of the world’s fastest-growing major economies, driven by robust domestic demand, stabilizing inflation, and continued structural reforms. In a positive sign for Indian consumers and businesses, inflation is expected to ease to 4.4% in FY25 and further decline to 4.1% in FY26. This moderation is crucial for maintaining consumer confidence and ensuring manageable interest rates, thereby supporting investment and consumption. The report highlights, “Among emerging market and developing economies, Russia and India drove most of the upward revision.”

In contrast, China's economic outlook has been revised downward to 4.8%, reflecting challenges in its real estate sector and weakening consumer confidence. While India’s per capita economic output is expected to rise by 6% in FY25, outperforming economies such as Brazil (2.6%), Russia (3.8%), China (4.9%), and the United States (2.3%).
Despite some moderation in growth from 8.2% in 2023, the IMF expects India’s economy to maintain a strong trajectory. The slowdown is partly attributed to the exhaustion of pent-up demand from the pandemic recovery, allowing the economy to reconnect with its long-term potential. This robust outlook is bolstered by India's ongoing reforms,including measures aimed at fostering innovation and boosting domestic industries.
Meanwhile, the IMF’s report also emphasized the importance of regional dynamics in shaping global economic performance. While the U.S. and emerging Asian economies, particularly India, continue to drive global growth in sectors such as semiconductors and artificial intelligence, advanced European economies face challenges due to geopolitical tensions and supply chain disruptions. As a result, global economic growth is projected to remain moderate at 3.1% over the next five years, highlighting a recovery that has yet to fully regain pre-pandemic momentum.

(Business Correspondent)