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Indian economy strong amidst turbulent waters
The press briefing was a part of the Spring Meetings of the World Bank Group and the IMF.
Pierre‑Olivier Gourinchas, director, IMF Research Department at the press briefing by the World Economic Outlook / X - @pogourinchas
The International Monetary Fund (IMF) raised India’s growth forecast for 2025 by 0.3 per cent to 6.8 percent.
During the April 2024 World Economic Outlook press briefing, Pierre‑Olivier Gourinchas, director of IMF Research Department, acknowledged India’s economy as one of the strong performers in the global scenario.
Gourinchas highlighted the revision in growth forecasts for the fiscal year 2023 to 2024, with an additional 0.3 percentage point upgrade projected for the fiscal year 2024 to 2025.
Daniel Leigh, division chief, IMF Research Department recommended that a tightening in monetary policy and in fiscal policy is necessary to bring inflation down. “We see inflation coming down — is in the target range 4.6 this year, 4.2 next year. There are upside risks to this forecast,” he said.
On India’s recent liberalization of foreign investment policies, he remarked, “An upside comes from the potential for reforms that would liberalize foreign investment and really boost exports and boost jobs and labour force participation. So it’s a very strong outlook, and there’s a balanced risk outlook.”
Meanwhile, the global economy was depicted as a ship sailing through choppy waters, but with resilience. Despite facing numerous challenges, the global economy had maintained steady growth and indicated a decline in inflation.
Gourinchas said that global growth stood at 3.2 percent in 2023 and was forecasted to maintain the momentum throughout 2024 and 2025. The key players were the United States and China.
Inflation, a measure of how fast prices are rising, was reported to be on a downward trajectory. Gourinchas added, “A resilient growth and rapid disinflation are consistent with favourable supply developments, including the fading of energy price shocks and a striking rebound in labor supply, supported by strong immigration in many advanced economies.”
Despite the positive outlook, the IMF cautioned against complacency. Geopolitical tensions posed threats to future economic stability. Moreover, the effects of climate change loomed.
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