NEW DELHI: The International Monetary Fund (IMF) has issued its latest economic projections, anticipating a gradual slowdown in India’s GDP growth over the next two years. According to the IMF, India’s GDP is expected to expand by 7% in 2024 and by 6.5% in 2025.

These projections come from the IMF's World Economic Outlook (WEO) report, which provides an in-depth review of the global economic landscape. The report cites several reasons for India’s moderated growth, including reduced global trade activity, softer domestic demand, and rising inflationary pressures.

“India’s economy is likely to encounter challenges over the next two years, due to a weakening in global trade and a drop in domestic demand,” said an IMF spokesperson. “However, structural reforms by the government and efforts to enhance the business climate are expected to bolster long-term growth.”

The IMF’s outlook carries important implications for India’s economy, especially regarding employment, investment, and fiscal policies. A slower growth rate may impact job creation, particularly in manufacturing and services. Additionally, reduced domestic demand and rising inflation could dampen private sector investment.

To address these challenges, proactive steps will be essential for the government and policymakers to maintain a steady growth trajectory. “The government should consider measures to boost domestic demand, such as increasing public investment and adopting policies that encourage consumer spending,” an economist suggested. “Similarly, the Reserve Bank of India (RBI) may need to manage inflation by adjusting interest rates if necessary.”

The IMF’s projection serves as a prompt for India’s government to address these economic hurdles. Through continued structural reforms and business-friendly policies, India can help sustain its growth momentum, ensuring a thriving and resilient economy in the years ahead.