Observing improved private consumption, IMF ups India's growth forecast to 7%

Amid rising private consumption, particularly in rural areas, International Monetary Fund (IMF) on Tuesday in its economic outlook pegged India's growth at 7 percent, up from 6.8 per cent for 2024-25.

"The forecast for growth in India has also been revised upward, to 7 per cent, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas," said the organisation in its official statement.

Earlier, the IMF had raised its forecast for India's GDP growth to 6.8 per cent from 6.5 per cent in April.


India's gross domestic product (GDP) grew at 7.8 per cent on an annual basis in the last quarter (Q4) of the FY24 . Further, the Centre uped its estimates for the overall growth rate of FY24 to be 8.2 per cent.


Overall, the IMF said Tuesday that it still expects the world economy to grow a lackluster 3.2 per cent this year, unchanged from its previous forecast in April and down a tick from 3.3 per cent growth in 2023. From 2000 through 2019, before the pandemic upended economic activity, global growth had averaged 3.8 per cent a year.

India, China in focus
The IMF, a 190-nation lending organization, works to promote economic growth and financial stability and reduce global poverty. In a blog post that accompanied the latest update to its World Economic Outlook, the IMF's chief economist, Pierre-Olivier Gourinchas, wrote that China and India would account for nearly half of global growth this year.

In Asia, China and India are expected to be the main drivers of growth, with China's forecast revised upward to 5.0 per cent in 2024 due to a rebound in private consumption and strong exports. However, the IMF cautioned that China faces risks stemming from weak confidence and unresolved property sector problems, which could lead to a greater reliance on the external sector.