IMF Raises India’s Growth Forecast to 6.4%
Why in the News ?
The International Monetary Fund (IMF) has revised India’s GDP growth forecast for FY2025-26 and FY2026-27 to 6.4%, citing easing global trade tensions, improved financial conditions, and a more benign external environment compared to earlier projections.
IMF Projections and Growth Outlook:
● India’s GDP growth is projected at 6.4% for both FY26 and FY27, up from 6.2% and 6.3%, respectively.
● The global economy is expected to grow at 3.0% in 2025 and 3.1% in 2026, revised up from earlier predictions.
● China’s growth received the biggest upgrade—from 4% to 4.8% in 2025.
● Other countries with improved outlooks include the US, Canada, Brazil, and Nigeria.
● The RBI also expects India’s GDP to grow by 6.5% in FY25 and 6.7% in FY27.
Trade Tensions and Policy Concerns
● Despite easing, tariffs remain historically high; US consumers face an average 18.2% tariff, down from 28% in April.
● The IMF cited the “unprecedented escalation” in trade tensions during April as a reason for earlier downward revisions.
● Global trade share is projected to decline from 57% (2024) to 53% (2030).
● IMF Chief Economist Pierre-Olivier Gourinchas warned of continued global uncertainty and downside risks.
● IMF downgraded 2024 global growth by 0.2 percentage points, remaining below pre-COVID averages.
| About the IMF and World Economic Outlook :● IMF (founded in 1944) monitors global economic trends and publishes World Economic Outlook (WEO) biannually. ● It provides macroeconomic forecasts, policy advice, and technical assistance to member countries. ● The WEO report evaluates global risks, trade flows, and country-specific growth prospects. ● GDP forecast revisions reflect changes in global trade, inflation, and monetary policy. ● IMF’s projections are widely used for economic planning and policymaking across countries. |