IMF raises India’s growth forecast to 6.7% from 6.3%

In its latest World Economic Outlook Update, the International Monetary Fund has revised upward India's growth forecast for FY24 to 6.7 percent from 6.3 percent. It also has upgraded its outlook for the world economy this year, envisioning resilient growth led by the United States and a slower pace of inflation.

The 190-country lending agency says it now expects the global economy to grow 3.1% this year, unchanged from 2023 but better than the 2.9% it had predicted for 2024 in its previous estimate in October.

Worldwide, the IMF thinks inflation will ease from 6.8% in 2023 to 5.8% in 2024 and 4.4% in 2025. In the most advanced economies, the agency expects inflation to drop this year to 2.6% and next year to the 2% level that the Federal Reserve and some other central banks have set as a target.

The combination of steady growth and falling inflation has raised hopes for a so-called soft landing for the global economy – a slowdown sufficient to contain inflation without causing a recession.

For the United States, the world's largest economy, the IMF sharply marked up its estimate for growth this year – to 2.1% from the 1.5% it had penciled in three months ago. The US economy expanded 2.5% in 2023 after an unexpected burst of year-end growth fuelled by consumers willing to spend despite higher borrowing costs.

(With Agency inputs)