Indian Economy News

Strong capital expenditure, domestic demand behind India's growth performance: IMF

The International Monetary Fund (IMF) has identified India as the world's fastest-growing major economy, attributing this growth to robust public investment and resilient domestic demand. In its Regional Economic Outlook report for the Asia and Pacific region, the IMF upgraded its growth projection for the region to 4.5% for the calendar year 2024, citing higher expectations in India and China. Director of the Asia and Pacific Department at the IMF, Mr. Krishna Srinivasan, highlighted India's accelerated growth driven by public investment. At the same time, Finance Minister Ms. Nirmala Sitharaman proposed a substantial increase in capital expenditure in the interim budget.

The IMF raised India's Gross Domestic Product (GDP) growth projection for 2024-25 to 6.8%, reflecting buoyant domestic demand and positive growth surprises. Additionally, the report noted India's GDP growth forecast for FY24 at 7.8%, up from 6.7% in previous projections. However, the IMF expects a slightly slow economic growth of 6.5% for FY26. In contrast, China's GDP growth is projected to decelerate from 5.2% in 2023 to 4.6% in 2024 and 4.1% in 2025, attributed to easing one-off factors and ongoing challenges in the property sector. The IMF's outlook also flagged concerns about weaker demand from China potentially impacting the region's exporters, highlighting the interconnectedness of economies in the region.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.