“India is one of the emerging market economies that is doing better…The upward revision is on account of strong growth, driven by a spending push. The difference (with the government estimate) is on account of second half growth slowdown,” IMF chief economist Pierre-Olivier Gourinchas said. The WEO said that growth reflected the resilience in domestic demand.
The official advance estimates for current fiscal year peg GDP growth at 7.3%, with the finance ministry projecting over 7% expansion next year. The IMF had originally estimated GDP growth for current fiscal at 6% and revised it upwards to 6.3% in October before the latest update.
Forecast for the global economy is also better than earlier, with growth projected at 3.1% in 2024, 0.2 percentage point higher than October due to more resilience in the US and several developing countries, as well as fiscal support in China.
“The clouds are beginning to part. The global economy begins the final descent towards a soft landing, with inflation declining steadily and growth holding up. But the pace of expansion remains slow, and turbulence may lie ahead,” IMF chief economist wrote in a blog.
IMF cautioned central banks against premature easing, amid signs that inflation was moderating in several countries.