NEW DELHI: The International Monetary Fund (IMF) on Friday retained India's growth forecast for 2024-25 at 6.5% but said that growth in the country has slowed more than predicted, led by a sharper-than-expected deceleration in industrial activity.
"In India, growth is projected to be solid at 6.5% in 2025 and 2026, as projected in Oct and in line with potential," the IMF said in its World Economic Outlook update.
The IMF's estimate for this year is similar to the World Bank, which has also forecast GDP growth for India at 6.5% for this year. For next year, the World Bank has estimated growth to be at 6.7%. India will still retain the tag of fastest growing major economy in the world, against the backdrop of geopolitical tensions and global policy uncertainty.
Several multilateral agencies have revised their growth estimates downwards for India after the National Statistics Office's (NSO) projection showed the economy is expected to expand by 6.4% - the lowest in four years in the current financial year, and sharply below the 8.2% recorded in 2023-24.
The sharp slowdown in growth has triggered calls for measures to boost consumption, which some experts say have been hit by stubborn inflationary pressures. Pressures have mounted on the Reserve Bank of India to cut rates to boost growth. The budget is expected to unveil measures to step up growth, amid the backdrop of an uncertain global economy. With respect to the projection in Oct, growth in 2025 for China was marginally revised upward by 0.1 percentage point to 4.6%.
Global growth has been projected at 3.3% both in 2025 and 2026, below the historical (2000-19) average of 3.7%. The forecast for 2025 is broadly unchanged from that in Oct 2024 WEO outlook, primarily on account of an upward revision in the US offsetting downward revisions in other major economies, according to IMF.
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