IMF Projects Strong Growth for India Amidst Slower Chinese Economy

The International Monetary Fund (IMF) has revised its growth forecast for India, predicting a robust 7% growth in 2024, an increase from the previous estimate of 6.8%. This positions India as a key player in the global economy, with its growth, alongside China's, expected to contribute nearly half of the world's economic expansion this year. In contrast, China's economy is projected to grow by 5% in 2024, consistent with earlier predictions, but faces a declining trajectory in the coming years. IMF Chief Economist Pierre-Olivier Gourinchas highlighted concerns regarding China's economic outlook, forecasting a slowdown to 4.5% in 2025 and further down to 3.3% by 2029. He noted that while China's economy has experienced significant growth over the past two decades, it has become less dependent on external factors for its expansion. Recent data indicated that China's economy grew by 4.7% year-on-year in the second quarter, falling short of economists' expectations. Global growth is anticipated to remain steady at 3.2% for 2024, with a slight increase to 3.3% in 2025. The IMF cautioned that while the outlook appears stable, potential challenges could arise, particularly regarding inflation rates. Additionally, the eurozone's growth forecast has been upgraded to 0.9%, driven by strong service sector performance and unexpected net exports in the first half of the year. This report underscores the contrasting economic trajectories of India and China, with India poised for significant growth while China navigates a period of slower expansion.