India's Growth Projections and the Global Economic Headwinds
UPSC Relevance
Prelims: Indian Economy (National Income - GDP; International Economic Institutions - International Monetary Fund (IMF), World Bank; Key Reports like the World Economic Outlook).
Mains:
General Studies Paper 3 (Economy): Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment. Projections from institutions like the IMF are often quoted in Mains answers.
Key Highlights from the News
The International Monetary Fund (IMF) has raised India's economic growth projection for 2025 from 6.4% to 6.6%.
Main reasons for this increase:
India achieved stronger-than-expected strong first quarter growth of 7.8% in the fiscal year.
This domestic growth helped overcome the adverse effects of U.S. tariffs.
However, the IMF has lowered India's growth projection for 2026 to 6.2%. This is because the growth momentum of the first quarter is unlikely to continue.
Globally, the IMF states that global growth will slow down due to "uncertainty and protectionism."
These projections are contained in the IMF's main report, the World Economic Outlook.
COMMENTS