The International Monetary Fund (IMF) forecasts that India will maintain its status as the fastest-growing major economy, anticipating a GDP growth of 6.5% in both 2024-25 and 2025-26, driven by strong private investment and macroeconomic stability. The IMF highlights the importance of implementing structural reforms to advance India toward becoming an advanced economy by 2047. Key reforms should focus on enhancing private investment, job creation, and increasing women’s labor participation. While inflation has decreased and the financial sector remains stable, ongoing governance reforms and trade integration are essential for sustained economic growth.
New York:
The International Monetary Fund (IMF), a multilateral financing agency, has projected that India will maintain its status as the fastest-growing major economy, achieving a GDP growth of 6.5 per cent in 2025-26, driven by strong private investment and macroeconomic stability.
The IMF noted that India’s impressive economic performance presents a chance for the nation to advance crucial and challenging structural reforms to achieve the goal of becoming an advanced economy by 2047.
“Real GDP is anticipated to grow by 6.5 per cent in both 2024-25 and 2025-26, underpinned by robust growth in private consumption due to sustained macroeconomic and financial stability.
As per the second advance estimate provided by the Indian government, the economy is projected to achieve a growth rate of 6.5 per cent for 2024-25. The IMF indicated, “Headline inflation is expected to align with targets as food price shocks diminish,” following Article IV consultations with India.
The IMF’s statement emphasized the necessity for deeper implementation of structural reforms to enhance private investment and employment and to drive growth.
“…comprehensive structural reforms are essential for creating high-quality jobs, invigorating investment, and unlocking higher potential growth. Focus should be on implementing labour market reforms, strengthening human capital, and promoting greater participation of women in the workforce,” it added.
Increasing private investment and foreign direct investment (FDI), the IMF emphasized, is crucial and will require stable policy frameworks, improved ease of doing business, governance reforms, and enhanced trade integration, which includes both tariff and non-tariff reduction measures.
Moreover, it stated that despite recent moderation, India’s economic growth has remained strong, with a year-on-year GDP growth rate of 6 per cent in the first half of 2024-25. Although food price fluctuations have introduced some volatility, inflation has largely remained within the Reserve Bank’s tolerance band of 2 to 6 per cent, as mentioned in the statement.
The financial sector has shown resilience, with non-performing loans at historic lows. Fiscal consolidation persists, and the current account deficit has been effectively managed, supported by robust growth in service exports.
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