According to the IMF’s World Economic Outlook projections, India’s future growth remains robust, positioning it as a key driver of global economic growth, particularly in Emerging and Developing Asia. The projections show:

  • 2023: India’s economy is expected to grow by 8.2%, which is the highest among major economies globally.
  • 2024: The growth rate is projected to slow slightly to 7.3%, still maintaining strong momentum compared to other countries.
  • 2025: India’s economy is expected to continue its growth trajectory with a forecasted growth rate of 6.5%.

The IMF highlights India’s resilience, fueled by strategic investments in infrastructure, technological advancements, and its role in the global demand for semiconductors and electronics. The nation’s ability to leverage these sectors, driven by advancements in artificial intelligence, positions it as a major economic force in the coming years.

Key Points Relevant to India:

  • India is highlighted as a key driver of growth in emerging Asia.
  • The country’s growth is attributed to strategic investments in public infrastructure and its ability to capitalize on the growing demand for semiconductors and electronics, a sector strongly influenced by advancements in artificial intelligence.

World Economic Outlook, October 2024: Policy Pivot, Rising Threats” report, offering an overview of the global economic landscape. The report highlights several key themes:

1. Global Growth Projections:
Global growth is expected to remain stable but at a sluggish pace in the near term. Since April 2024, projections have been revised, with upgrades for the United States countering downgrades for other advanced economies, particularly in Europe. In five years, global growth is expected to reach 3.1%, which the IMF characterizes as “mediocre” compared to pre-pandemic levels.

2. Regional Variations:
While global growth is projected to be modest overall, there are notable regional differences. Emerging Asia, especially China and India, is experiencing robust growth, driven by factors like rising demand for semiconductors and electronics, fueled by investments in artificial intelligence. This suggests that India is capitalizing on global technological advancements and strategically investing in infrastructure to drive economic expansion. In contrast, the Middle East, Central Asia, and sub-Saharan Africa face economic downgrades due to disruptions in commodity production, conflicts, civil unrest, and extreme weather events.

3. Inflation and Policy Response:
Global disinflation is ongoing, but services price inflation remains high in many regions. This highlights the importance of central banks carefully adjusting monetary policy to achieve a “smooth landing” for the global economy. The report also stresses the need for structural reforms to enhance long-term growth prospects while protecting vulnerable populations.

4. Policy Pivot:
In light of numerous threats to the global economy, the report calls for a “policy pivot.” This involves shifting from monetary policy tightening to ensuring sustainable debt dynamics, rebuilding fiscal buffers, and implementing structural reforms to boost long-term growth and expedite the green transition.

5. Key Global Challenges:
The report outlines several major challenges facing the global economy, including escalating geopolitical tensions, potential financial market volatility, problems in China’s property sector that could have global repercussions, rising protectionism and geoeconomic fragmentation, and disruptions to the disinflation process.