Daijiworld Media Network – New Delhi
New Delhi, Jan 18: India’s economic growth is projected to remain solid at 6.5 per cent in 2025 and 2026, aligning with its potential, according to the International Monetary Fund’s (IMF) latest World Economic Outlook (WEO) update.
This projection follows the World Bank’s recent estimate of a higher growth rate of 6.7 per cent for India in the upcoming fiscal year starting April, maintaining its position as the fastest-growing major economy.
Globally, the IMF noted a steady but uneven economic trajectory, with global GDP growth expected to hold at 3.3 per cent in 2025 and 2026. Inflation continues to decline, projected at 4.2 per cent in 2025 and 3.5 per cent in 2026, edging closer to central bank targets.
“Global growth remains aligned with weakened potential since the pandemic. Monetary policies must remain agile to address inflation risks and prevent expectations from de-anchoring,” said IMF Chief Economist Pierre-Olivier Gourinchas.
The IMF highlighted stronger-than-expected growth in the US due to robust domestic demand, contrasting with Europe’s sluggish recovery amid high energy prices. Emerging markets, including China, show resilience, with China poised for a modest rebound.
In India, growth is underpinned by sustained expansion in the services sector and strengthening manufacturing activity, driven by government initiatives to improve the business environment. The World Bank’s report also emphasized these factors, projecting growth at 6.7 per cent for the next two fiscal years.
The Reserve Bank of India (RBI) faces growing speculation about rate cuts in the coming months, as cooling inflation provides room for monetary easing. However, the IMF cautioned that monetary policies must remain vigilant to ensure fiscal stability and prevent policy disruptions to the disinflation process.
“A few central banks are raising rates, signaling divergence in monetary policy, while others proceed cautiously in the easing cycle, keeping an eye on inflation, labor markets, and exchange rate movements,” the IMF report noted.
Structural reforms aimed at fostering innovation and competition remain crucial for sustaining growth while ensuring fiscal stability. With India’s economy expected to maintain its robust momentum, its role in driving global growth is set to remain pivotal in the coming years.