Context: The International Monetary Fund (IMF) has released its World Economic Outlook (WEO) at the Annual Meetings in Washington, projecting growth rates and economic trends globally.
Data from World Economic Outlook:
- India’s growth:
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- Projected growth for FY 2024-25: 7%
- Projected growth for FY 2025-26: 6.5%
- Decline from 8.2% in 2023 attributed to the normalization of demand after the pandemic.
- Global growth:
- Expected global output growth: 3.2% for 2024 and 2025.
- Inflation:
- Global inflation: From 9.4% in Q3 2022 to an expected 3.5% by end of 2025.
- Risks identified:
- Geopolitical tensions, particularly the Russia-Ukraine war and conflict in West Asia.
- Growing protectionism and tight monetary policies.
- Sovereign debt issues and weak economic activity in China.
- IMF recommendations:
- Triple policy pivot:
- Monetary policy neutrality: Gradually shift to neutral stances in monetary policies.
- Build fiscal buffers: Reinforce fiscal policies after years of expansive measures.
- Structural reforms: Focus on productivity growth, coping with demographic changes, climate transition, and increasing resilience.
- Triple policy pivot:
