India to become world’s 3rd largest economy by ’27 – IMF

The International Monetary Fund (IMF) expects India to become the world’s third largest economy by 2027, an IMF senior official told a local newspaper on Friday.

Gita Gopinath, IMF’s First Deputy Managing Director, said India’s growth has surpassed forecasts, with the Fund expecting a boost in private consumption and better harvests thanks to a good monsoon season.

The IMF has recently revised its growth projection for India to 7 per cent for the financial year 2024-25, attributing it to a rebound in private consumption.

This upward revision from the previous estimate of 6.8 per cent is triggered by the carryover effects of the last fiscal year’s stronger-than-expected performance and a revival in consumer spending, especially in rural areas.

The new forecast aligns closely with the Reserve Bank of India‘s (RBI) projection of 7.2 per cent growth for the same period.

While the Economic Survey predicted a growth rate of 6.5-7 per cent for FY25, the IMF’s more optimistic estimate reflects the anticipated boost in rural consumption due to better agricultural incomes.

Attribution: Business Today

Subediting: Y.Yasser