{"id":41937,"date":"2025-04-24T19:30:13","date_gmt":"2025-04-24T14:00:13","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=41937"},"modified":"2025-04-24T19:30:33","modified_gmt":"2025-04-24T14:00:33","slug":"imf-projects-india-economy-to-grow6-2-percent-in-2025","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/24-04-2025\/imf-projects-india-economy-to-grow6-2-percent-in-2025","title":{"rendered":"IMF Projects India\u2019s Economy to Grow at 6.2% in 2025"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>According to the April 2025 edition of the IMF\u2019s World Economic Outlook, India will remain the fastest growing major economy over the next two years.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>World Economic Outlook Report<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The World Economic Outlook (WEO) is the <strong>International Monetary Fund\u2019s<\/strong> key report on global economic trends and policy challenges.\u00a0<\/li>\n\n\n\n<li><strong>Published twice a year<\/strong> it provides projections for the near and medium term, covering advanced, emerging, and developing economies.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Key highlights\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>India\u2019s Growth outlook: <\/strong>India is projected to remain the fastest-growing large economy and is expected to grow by <strong>6.2 percent in 2025 <\/strong>and <strong>6.3 percent in 2026.<\/strong><\/li>\n\n\n\n<li><strong>Global Growth outlook:<\/strong> The global economic growth will be much lower, at <strong>2.8 percent<\/strong> in 2025 and <strong>3.0 percent<\/strong> in 2026.<\/li>\n\n\n\n<li><strong>Emerging Asia:<\/strong> The region is also expected to grow strongly, led by India, but faces downward revisions due to global trade disruptions.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"dce1d9\" data-has-transparency=\"false\" loading=\"lazy\" decoding=\"async\" width=\"501\" height=\"449\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/global-economic-growth-rates-2025-2026.png\" alt=\"global economic growth rates 2025-2026\" class=\"not-transparent wp-image-41938\" style=\"--dominant-color: #dce1d9; width:347px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/global-economic-growth-rates-2025-2026.png 501w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2025\/04\/global-economic-growth-rates-2025-2026-300x269.png 300w\" sizes=\"auto, (max-width: 501px) 100vw, 501px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>Reasons for slowdown in world economy<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Tariff War 2.0: <\/strong>Since early 2025, new tariffs by the US on imports, coupled with retaliatory measures, have triggered a fresh wave of trade tensions.<\/li>\n\n\n\n<li><strong>Slowing Consumer Confidence: <\/strong>\u00a0As new tariffs increase costs and lower disposable incomes, consumer spending has weakened, especially in the US and Europe.<\/li>\n\n\n\n<li><strong>Inflation:<\/strong> While headline inflation has cooled from its peak, core inflation remains sticky, particularly in services.<\/li>\n\n\n\n<li><strong>Diminished Policy Space: <\/strong>High public debt and rising interest rates have limited the ability of governments to respond with countercyclical policies.<\/li>\n\n\n\n<li><strong>Aging populations<\/strong> in countries like Japan, Germany, and China are reducing the available workforce, constraining long-term growth.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reasons for India\u2019s Resilience<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Domestic Demand: <\/strong>India&#8217;s growth remains largely driven by robust domestic consumption and investment, particularly in infrastructure and services.\n<ul class=\"wp-block-list\">\n<li>This has weakened global investor sentiment, triggered financial market volatility, and elevated policy uncertainty to unprecedented levels\u200b<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Structural Strengths:<\/strong>\n<ul class=\"wp-block-list\">\n<li>A young population and expanding digital economy.<\/li>\n\n\n\n<li>A growing middle class with increasing consumption power.<\/li>\n\n\n\n<li>Government-led capex push and PLI schemes that bolster industrial activity.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Way Ahead<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Structural reforms:<\/strong> Durable structural reforms across several areas, including labor markets, education, regulation and competition, and financial sector policies, can jointly lift productivity and potential growth and support job creation.\u00a0<\/li>\n\n\n\n<li><strong>Technological Integration:<\/strong> Technological progress, related to digitalization and AI, can enhance productivity and potential growth.<\/li>\n\n\n\n<li><strong>Fiscal Prudence:<\/strong> Maintaining fiscal sustainability amid high global debt and rising interest rates is critical.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>International Monetary Fund (IMF)<\/strong><br>&#8211; The IMF was established in <strong>1944<\/strong> in the aftermath of the Great Depression of the 1930s.<br>&#8211; The organization is currently composed of <strong>190 member <\/strong>countries.<br>1. Each member has representation on the IMF&#8217;s executive board in proportion to its financial importance.\u00a0<br>&#8211; The primary goal of the IMF back then was to bring about international economic coordination to prevent competing currency devaluation by countries trying to promote their own exports.\u00a0<br>&#8211; Eventually, the IMF evolved to be a lender of last resort to governments of countries that had to deal with severe currency crises.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/pib.gov.in\/PressReleasePage.aspx?PRID=2123826\" target=\"_blank\" rel=\"noopener\"><strong>PIB<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">According to the April 2025 edition of the IMF\u2019s World Economic Outlook, India will remain the fastest growing major economy over the next two years.<\/li>\n<p><\/p>\n<h3><strong>World Economic Outlook Report<\/strong><\/h3>\n<li class=\"ms-5\">The World Economic Outlook (WEO) is the International Monetary Fund\u2019s key report on global economic trends and policy challenges.\u00a0<\/li>\n<li class=\"ms-5\">Published twice a year it provides projections for the near and medium term, covering advanced, emerging, and developing economies.\u00a0<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/24-04-2025\/imf-projects-india-economy-to-grow6-2-percent-in-2025\" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-41937","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=41937"}],"version-history":[{"count":2,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41937\/revisions"}],"predecessor-version":[{"id":41955,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/41937\/revisions\/41955"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=41937"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=41937"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=41937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}