World Economic Outlook (Syllabus: GS Paper 3 – Economy)

Context: India's economy is projected to grow at 6.5% in the financial year starting April 1, 2024, and at a similar pace the year after, according to the International Monetary Fund's World Economic Outlook released recently.

IMF’s World Economic Outlook Report

• IMF Raises India's GDP Growth: IMF increases India's GDP growth projection to 6.7% for FY24, up from the previous 6.3% estimate in October 2023.
• Steady Growth Predicted for India: India's GDP growth expected to remain stable at 6.5% for both FY25 and FY26, reflecting domestic demand resilience.
• RBI's Optimistic GDP Estimate: Reserve Bank of India estimates a robust 7.4% GDP growth for India in FY24.
• Factors Supporting Improved Outlook: Stronger private and public spending, increased labor force participation, mended supply chains, and lower energy prices contribute to the improved global economic outlook.
• Global Growth Forecast: IMF predicts global growth of 3.1% in 2024 and maintains a forecast of 3.2% for 2025, below the historical average.
• Inflation and Oil Price Projections: IMF projects global headline inflation at 5.8% for 2024, with a lowered forecast of 4.4% for 2025. Average oil prices expected to drop in 2024 and 2025.
• Concerns About Red Sea Attacks: IMF acknowledges potential challenges from geopolitical shocks, such as Red Sea attacks, but anticipates a limited impact on the broader economy.

International Monetary Fund (IMF) 

• About: The IMF works to achieve sustainable growth and prosperity for all of its member countries.
• Establishment: In 1944 in the aftermath of the Great Depression of the 1930s.
• Member countries: 190 countries.
• Headquarters: Washington, D.C
• Representation: Each member country has a representation on the IMF's executive board.