New Delhi
The International Monetary Fund (IMF) has said in its World Economic Outlook (WEO) report that India’s economy is expected to grow at a strong 6.5 percent economic growth rate in 2025 and 2026. This prediction of IMF has come at a time when the World Bank has estimated India’s economy to grow at the rate of 6.7 percent in the next financial year.
According to the IMF, the global economy is stable but there is a big difference in growth rates between countries. Global GDP growth slowed to 0.1 percent in the third quarter of 2024, below last October’s estimate. This decline was seen due to weak economic data in some countries of Asia and Europe. “Global growth is projected to remain stable at 3.3 percent this year and next,” said Pierre-Olivier Gorinchas, IMF chief economist. The potential growth rate has been weak after the pandemic. “Inflation is continuously declining and it may come down to 4.2 percent this year and 3.5 percent next year.”
The US economy is performing better than expected due to strong domestic demand, while Europe faces high energy prices and slow growth. Whereas among emerging markets, China is slowly recovering. The IMF said that changes in monetary policies and interruptions in the process of reducing inflation could affect financial stability. Central banks will have to remain alert to maintain policy stability and control inflation. In India, all eyes are on the next RBI meeting as there is a possibility of interest rate cut due to decline in inflation.
The World Bank has also said that India’s services sector will continue to grow and efforts by the government to boost the manufacturing sector will underpin economic growth. India’s growth rate in the next two financial years is estimated to be 6.7 percent.
Decline in India’s growth rate is a matter of concern
The decline in India’s growth rate is a matter of concern. The organization says that now the government will have to take steps to boost the economy. Policies will have to be made to improve the industrial sector. The global economy is also facing challenges. Inflation and geopolitical tensions are responsible for this. International cooperation is necessary to overcome these challenges.
Global growth rate also low
According to the IMF, the global economic growth rate is estimated to be 3.3 percent for 2025 and 2026. This is lower than the historical average of 3.7 percent for 2000-19. The 2025 estimate is the same as the October 2024 WEO. This balance is maintained due to increase in US data and decline in other major economies. The IMF expects global inflation to decline to 4.2 percent in 2025 and 3.5 percent in 2026. Developed economies are expected to achieve target rates sooner than emerging markets and developing economies.
US economy strong
According to this, the American economy remains strong. This is contributed by the strong wealth effect and favorable monetary and financial conditions. Its growth rate in 2025 is estimated to be 2.7 percent. IMF chief economist Pierre-Olivier Gourinches said a decline in inflation rates would help offset recent global disruptions. These disruptions include the effects of the pandemic and Russia’s Including the consequences of the invasion of Ukraine, which led to the largest increase in inflation in four decades.
China’s growth forecast increased
For China, the IMF raised its growth forecast by 0.4 percentage points to 4.5 percent growth for next year. This indicates improvement in China’s economy.
