Indian economy to grow 6.3% in FY24 and FY25: IMF
Indian economy is likely to log 6.3% growth in FY24 and FY25 on the back of macroeconomic and financial stability, International Monetary Fund’s Executive Board said Tuesday.
“India’s economy showed robust growth over the past year. Headline inflation has, on average, moderated although it remains volatile.
Employment has surpassed the pre-pandemic level and, while the informal sector continues to dominate, formalisation has progressed,” the Article IV consultation conducted by its Executive Board noted.
The international fund lauded the macroeconomic policies and reforms of the government, stating that India could achieve even higher growth, with greater contributions from labour and human capital, with the implementation of structural reforms.
“The country’s foundational digital public infrastructure and a strong government infrastructure program will continue to sustain growth,’ it said.
IMF’s growth projection is much lower than the Reserve Bank of India’s Monetary Policy Committee growth forecast of 7% for FY24. The MPC revised its growth numbers in December owing to a strong performance in the first half.
The Indian economy averaged 7.7% growth in the first two-quarters of the fiscal due to strong consumption demand and rising investment.
“Stronger than expected consumer demand and private investment would raise growth.
Further liberalization of foreign investment could increase India’s role in global value chains, boosting exports. Implementation of labour market reforms could raise employment and growth,” the IMF said.
The multilateral body expects investment to rise to 31.9% of GDP by FY25 and savings to rise to 30%.
However, it also noted that a sharp global slowdown could affect growth and weather
