International Desk, Jan 30: Fueled by strong domestic demand, India’s economic engine is set to hum at a 6.5% growth rate in 2024, according to the latest IMF forecast. This outpaces other major economies, including the US (2.1%), Germany (0.5%), France (1%), Japan (0.9%), and even China (4.6%).
The IMF report sees a “soft landing” for the global economy, with disinflation and steady growth taking hold. However, it also raises caution flags – a spike in commodity prices or a deepening Chinese property crisis could derail this optimistic outlook.
India’s economic success story stems from several factors. Robust domestic demand, driven by private consumption and investment, forms the backbone of its growth. This, in turn, traces its roots to government reforms and initiatives implemented over the past decade. Investments in infrastructure, both physical and digital, alongside measures to boost manufacturing, have further fueled economic activity.
The IMF expects India’s growth momentum to continue into the next fiscal year (2024-25), with projections hovering around 7%. This sustained high growth solidifies India’s position as the world’s fastest-growing major economy for the foreseeable future.
However, the report also highlights potential stumbling blocks. A resurgence of global commodity price shocks, fueled by geopolitical tensions, could pose a significant challenge. Additionally, the ongoing turmoil in China’s property sector casts a shadow of uncertainty, with the potential to disrupt global growth if it worsens.
Despite these concerns, the IMF’s overall tone remains cautiously optimistic. Global growth is projected to reach 3.1% in 2024 and 3.2% in 2025, with India leading the charge as the engine of economic dynamism. The key for policymakers, the report concludes, lies in navigating the delicate descent of inflation toward the target and implementing well-calibrated monetary policies.
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