IMF's Latest Update on India's Economic Growth

The International Monetary Fund (IMF) has recently indicated a more significant than expected slowdown in India's economic growth, primarily due to a sharp deceleration in industrial activities. The IMF projects India's growth to remain at 6.5% until 2026, a decline from 8.2% in 2023.

"Growth in India slowed more than expected, led by a sharper-than-expected deceleration in industrial activity," the IMF stated in its latest World Economic Outlook update. This slowdown is part of a broader global trend, with the IMF projecting global economic growth at 3.3% for 2025 and 2026, below the historical average of 3.7% from 2000-19.

Global Economic Forecast and Inflation Trends

The IMF anticipates a reduction in global headline inflation to 4.2% in 2025, further decreasing to 3.5% in 2026. Advanced economies are expected to achieve target inflation rates sooner than emerging markets and developing economies. The US economy, in particular, shows robust underlying demand, supported by strong wealth effects and accommodative monetary and financial conditions, with growth projected at 2.7% in 2025.

China's Revised Growth Forecast

Meanwhile, the IMF has revised China's growth forecast upward by 0.4 percentage points, projecting a 4.5% growth for the next year. This adjustment reflects the IMF's confidence in China's economic recovery and resilience amidst global uncertainties.