IMF ups India growth forecast citing strong domestic demand

FY24 growth now seen at 7.8%, FY25 rate at 6.8%

- PRIYANSH VERMA

THE INTERNATIONAL MONETARY Fund (IMF) has raised its forecast for India's GDP growth in FY24 by a steep 110 basis points (bps) to 7.8%. This is even higher than the expansion rate of 7.6% projected by the National Statistical Office (NSO) in its second advance estimate.

The IMF also revised upwards the FY25 GDP growth projection for the country by 30 bps to 6.8% and retained the forecast for FY26 at 6.5%.

To justify the upward revisions, the IMF cited"the robustness reflecting continuing strength in domestic demand and a rising working-age population". The IMF forecast for FY25 is, however, still 20 bps lower than the Reserve Bank of India's (RBI) projection of 7% for the year.

Finance Minister Nirmala Sitharaman had last month said GDP may have grown above 8% in FY24 due to the impact of "improved inflation management" and "macroeconomic stability".