- The International Monetary Fund (IMF) maintained its June growth projections for India in its latest World Economic Outlook (WEO) report, released during the World Bank and IMF Annual Meetings.
- India is expected to grow at 7% in FY2024 and 6.5% in FY2025.
- The drop from 8.2% in 2023 is attributed to the exhaustion of pent-up demand from the pandemic.
- Global Growth and Inflation: World output is projected to grow at 3.2% in 2024 and 2025. Global inflation has declined, expected to reach 3.5% by 2025, down from a high of 9.4% in 2022.
- Key Global Risks:
- Geopolitical risks, including the Russia-Ukraine war and conflicts in West Asia.
- Growing protectionist policies and prolonged tight monetary policies.
- Sovereign debt stress and weak economic activity in China.
- The IMF recommends a “triple policy pivot” including:
- Moving towards a neutral monetary policy stance.
- Building fiscal buffers after years of loose fiscal policy.
- Implementing structural reforms to enhance growth, address climate transition, and boost resilience.
Dig Deeper: Read about K-shaped economic recovery.
