IMF forecasts 6.5% growth for Indian economy over next two years

The International Monetary Fund (IMF) has predicted a 6.5% growth rate for the Indian economy over the next two fiscal years in its latest World Economic Outlook update, released on January 17. This projection is consistent with the IMF's October update and aligns closely with the Indian government’s estimate of 6.4% growth for 2024-25.

Also Read: IMF predicts weaker Indian economy amid steady global growth in 2025

India’s growth momentum, however, has shown signs of slowing. Recent data revealed a decline in economic expansion to 6.4% in the last fiscal year from 8.2% in the preceding year. In the second quarter of 2024-25, growth dipped further to 5.4%, marking a seven-quarter low, primarily due to weaker manufacturing and investment activity.

Despite these challenges, India is expected to remain the fastest-growing major economy globally, supported by a recovery in manufacturing and robust domestic demand. The World Bank, in a recent update, projected an even higher growth rate of 6.7% for the next two fiscal years, emphasizing optimism around industrial activity.

Globally, the IMF expects economic growth to stabilize at 3.3% over the next two years, a slight improvement from 3.2% in 2024. However, risks such as trade disruptions and protectionist policies could affect economic recovery.

India’s strong growth prospects continue to position it as a key driver of global economic stability, despite emerging headwinds.