India Predicted to Lead Global Economic Growth in 2024

India Predicted to Lead Global Economic Growth in 2024

India Predicted to Lead Global Economic Growth in 2024

The International Monetary Fund (IMF) forecasts India to emerge as the fastest-growing economy in 2024, with a robust growth rate of 6.5 percent. In comparison, major economies like the US, Germany, France, Japan, and China are expected to show more modest growth. The US is projected to grow at 2.1 percent, Germany at 0.5 percent, France at 1 percent, Japan at 0.9 percent, and China at 4.6 percent.

Global Growth Outlook and Risks

The IMF’s global growth projection for 2024 is 3.1 percent, with a slightly higher forecast than in October 2023. The risks to global growth are deemed broadly balanced, and there is potential for a ‘soft landing’ with disinflation and steady growth. However, the report highlights potential challenges, including commodity price spikes from geopolitical shocks and property sector issues in China.

Near-Term Challenges and Policy Recommendations

The near-term challenges for policymakers include managing inflation descent, calibrating monetary policy, and focusing on fiscal consolidation. The IMF emphasizes the need for efficient multilateral coordination to address debt resolution, avoid distress, create space for investments, and mitigate the effects of climate change.

Indian Economic Strength and Outlook

The Ministry of Finance in India’s monthly review report suggests the Indian economy is projected to grow close to 7 percent in the financial year 2024-25. This growth is attributed to the strength of domestic demand, driven by reforms implemented by the government over the last decade. The report highlights the robustness in domestic demand, including private consumption and investment, and emphasizes the positive impact of infrastructure investment and manufacturing measures on economic activity.