India remains the top performer among large economies this year, and the next, with China following at 4.6 pc in 2024 and 4.1 pc in 2025…reports Asian Lite News
The International Monetary Fund (IMF) has pegged India’s growth projection to 6.8 pc this year, an increase of 0.3 pc over its January 2024 update.
The IMF in its World Economic Outlook (WEO), released on Tuesday, said growth in India is projected to remain strong at 6.8 per cent in 2024 and 6.5 per cent in 2025.
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The robustness reflects continuing strength in domestic demand and a rising working-age population, it added.
In its January 2024 update to WEO released in October, the IMF had projected the Indian Economy to grow at 6.5 per cent each in 2024 and 2025.
India remains the top performer among large economies this year, and the next, with China following at 4.6 pc in 2024 and 4.1 pc in 2025.
Growth of Global Output is expected to maintain a steady rate of 3.2 per cent this year, as well as in 2025, the pace it grew at in 2023.
“The global economy remains remarkably resilient, with growth holding steady as inflation returns to target,” the IMF observed.
Despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops, the WEO added.
Futures markets suggest that oil prices will slide by 2.5 per cent year over year to average $78.60 per barrel in 2024 and will continue to fall to $67.50 in 2029, the IMF said, commenting on crude prices. It sees the risks to this price outlook as “balanced”.
“Upside price risks could arise from an escalation of the Middle East conflict and attacks on Russian oil infrastructure. Downside risks could arise from a slowdown in Chinese oil demand and strong non-OPEC supply growth, possibly coupled with a rise in OPEC+ oil supply to regain market share,” the IMF added.
Meanwhile, the latest UN Conference on Trade and Development (UNCTAD) report released on Tuesday forecasts global economic growth at 2.6 per cent in 2024 barely above the 2.5 per cent threshold commonly associated with a recessionary phase.
However, amid the gloomy global scenario, it states that India’s economy is buoyed by strong public investment and service sector growth, with a forecasted expansion of 6.5 per cent in 2024.
The report states that in Europe, countries like Germany and Italy are struggling with weak economic activity and facing industrial slowdowns and fiscal constraints, impacting their growth projections.
As far as the Americas are concerned, growth is expected to slow, with Argentina facing severe inflation, and Brazil’s economic momentum dampened by external pressures and reliance on commodities. North America remains relatively resilient, though challenges continue.
Africa is projected to grow at 3.0 per cent in 2024, up slightly from 2.9 per cent in 2023. Armed conflicts and climate impacts pose significant challenges in several countries.
Meanwhile, the continent’s largest economies – Nigeria, Egypt and South Africa – are underperforming, affecting overall prospects.
Growth in the Oceania region, particularly in Australia, is expected to remain subdued, with the low-growth period extending into 2024.
The report also observes that in 2023, global merchandise trade fell by about 1 per cent in real terms, marking a significant divergence from overall economic growth.
The contraction was partly due to trade tensions among some large economies and subdued global demand.
Over the last six months, disruptions in key shipping routes, such as the severe drought affecting the Panama Canal and attacks on vessels in the Red Sea, have strained merchandise trade further and significantly increased shipping costs, the report points out.
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