IMF raises India's FY25 GDP growth forecast to 7%

Prior to this, the IMF had raised its forecast for India's GDP growth to 6.8 percent from 6.5 percent in April.

"The forecast for growth in India has also been revised upward, to 7.0 percent, this year, with the change reflecting carryover from upward revisions to growth in 2023 and improved prospects for private consumption, particularly in rural areas," said the organisation in its official statement.

India's gross domestic product (GDP) grew by 7.8 percent on an annual basis in the last quarter (Q4) of FY24. Additionally, the Centre revised its estimates for the overall growth rate of FY24 to 8.2 percent.

Overall, the IMF maintained its forecast for the global economy to grow by 3.2 percent this year, unchanged from its previous prediction in April and slightly down from the 3.3 percent growth in 2023.

From 2000 to 2019, before the pandemic disrupted economic activity, global growth had averaged 3.8 percent annually.

The IMF, a 190-nation lending organization, aims to promote economic growth, financial stability, and reduce global poverty. In a blog post accompanying the latest update to its World Economic Outlook, the IMF's chief economist, Pierre-Olivier Gourinchas, stated that China and India would account for nearly half of global growth this year.

In Asia, China and India are expected to be the main drivers of growth, with China's forecast revised upward to 5.0 percent in 2024 due to a rebound in private consumption and strong exports.

However, the IMF warned that China faces risks from weak confidence and unresolved property sector issues, which could increase reliance on the external sector.