IMF Lauds India's Economic Resilience, Projects 6.5% Growth for FY25 & FY26

The International Monetary Fund (IMF) has credited India's prudent macroeconomic policies and reforms for strengthening the country's economy, making it both resilient and the fastest-growing major economy. The IMF's latest report, released following its Article IV consultations with India, underscores these factors as crucial in achieving the nation's goal of becoming an advanced economy by 2047.

The report comes as government data indicates a resurgence in economic momentum during the December quarter, with GDP growth rebounding to 6.2% from a seven-quarter low of 5.6% in the July-September period.

According to the IMF, "Real GDP is expected to grow at 6.5 percent in 2024/25 and 2025/26, supported by robust growth in private consumption on the back of sustained macroeconomic and financial stability. Headline inflation is expected to converge to target as food price shocks wane."

While India's current account deficit is projected to widen slightly, it is expected to remain moderate at -1.3% of GDP in 2025/26. The report also highlighted India's financial sector strength, improved corporate balance sheets, and the nation's strong digital public infrastructure as key enablers of long-term economic growth and social welfare gains.

Calling for further "comprehensive structural reforms," the IMF emphasized the need to create high-quality jobs, boost investment, and unlock higher growth potential. 

SBI Predicts GDP Revision in May

Meanwhile, SBI Research has projected that India's GDP growth for Q4 FY25 could reach 7.6%, based on an estimated 6.5% GDP growth for FY25. The analysis also suggested that a revision of quarterly growth figures is likely in May 2025.

India's GDP growth of 6.2% in Q3 FY25 was driven by strong performances in agriculture and industry, particularly the manufacturing sector. As per SBI's report, "Ensuring GVA increased by 6.2% in Q3 FY25 (5.8% in Q2 FY25), India's economy showed robust growth in agriculture and industry, especially manufacturing activities during the quarter."

Additionally, the report noted that India's real GDP growth rate of 9.2% for 2023-24 is the highest in 12 years, barring the exceptional FY22 growth of 9.7%, which was the highest since independence.