IMF raises India's FY25 GDP growth forecast by 30 bps to 6.8%

The IMF attributed this adjustment to robust domestic demand. However, the IMF's prediction falls short of the government's projection of 7% growth.

“Growth in India is projected to remain strong at 6.8 percent in 2024 (FY25) and 6.5 percent in 2025 (FY26), with the robustness reflecting continuing strength in domestic demand and a rising working-age population,” the IMF said in its report.

The report presents data and forecasts for India based on a financial year basis.

The IMF has revised India's GDP growth projection for FY24 to 7.8%, up from 6.7% in its January report.

However, for FY26, the IMF expects a slight deceleration in economic growth to 6.5%, remaining consistent with its January update.

On inflation, the fund projected India’s consumer price inflation declining from an average of 5.4 percent in FY24 to 4.6 percent in FY25, and further to 4.2 percent in FY26.

In its latest monthly economic report for February, the finance ministry exuded confidence that robust growth, along with stable inflation and external accounts, as well as a promising employment outlook, would lead the Indian economy to conclude FY24 on a positive trajectory.

“There are headwinds like indications of hardening crude oil prices and global supply chain bottlenecks to trade. Nonetheless, India, on the whole, looks forward to a bright outlook for FY25,” it said.