India`s economic growth remained robust: IMF report
The International Monetary Fund (IMF) in its latest report has showed that India’s economic growth remained robust, with Gross domestic product (GDP) growth of 6 percent Y-o-Y in the first half of 2024/25. Inflation has broadly declined within the tolerance band, though food price fluctuations have created some volatility. The financial sector has remained resilient, with non-performing loans at multi-year lows. Fiscal consolidation has continued, and the current account deficit has remained well contained, supported by strong growth in service exports.
According to the report, in 2024/25 and 2025/26, Real GDP is likely to grow at 6.5 percent, on the back of robust growth in private consumption due to sustained macroeconomic and financial stability. Further, it said that headline inflation is likely to converge to target as food price shocks wane. The current account is expected to widen somewhat but remain moderate at -1.3 percent of GDP in 2025/26. Besides, the report noted that India’s financial sector health, strengthened corporate balance sheets, and strong foundation in digital public infrastructure underscore India’s potential for sustained medium-term growth and continued social welfare gains.
IMF report further underlined that deepening geo-economic fragmentation could affect external demand, while deepening regional conflicts could result in oil price volatility, weighing on India’s fiscal position. Domestically, the recovery in private consumption and investment may be weaker than expected if real incomes do not recover sufficiently. Weather shocks could adversely impact agricultural output, lifting food prices and weighing on the recovery in rural consumption. On the upside, deeper implementation of structural reforms could boost private investment and employment, raising potential growth.
