The International Monetary Fund (IMF) forecasts India to further boost its contribution to global growth over the course of the next five years as the Indian economy continues to grow fast. According to the study, Krishna Srinivasan, director of the IMF’s Asia and Pacific Department, believes India will contribute 18% of global growth by 2028, up from 16%.
According to the latest IMF estimates, India’s stronger growth in comparison to China’s economic slump will result in India contributing more to the global growth.
China, however, continues to lead in terms of the size of their economies. According to the IMF’s most recent projections, China’s nominal GDP would rise to $23.61 trillion by 2028, while India’s will rise to $5.94 trillion. According to IMF estimates, China and India will provide over half of global growth in both 2023 and 2024.
The International Monetary Fund said in its latest World Economic Outlook report, released in the first week of October, that India’s GDP is expected to increase by 6.3% in the current fiscal year, up 20 basis points from its previous projection in July. Notably, the IMF increased its India GDP growth prediction for 2023-24, the second increase in three months. This forecast pushed India’s GDP growth rate closer to the 6.5% figure anticipated by the Indian government.
However, the IMF made no adjustments to its forecast for the subsequent year, maintaining India’s GDP growth rate of 6.3% for fiscal year 2024-25. “Growth in India is projected to remain strong, at 6.3% in both 2023 and 2024, with an upward revision of 0.2 percentage point for 2023, reflecting stronger-than-expected consumption during April-June,” the body noted.
It is important to note that the economic growth of India has been on the rise since the BJP government took over the governance in the year 2014. The Indian economy has grown significantly in the 9 years since then. India has risen from the tenth-largest economy in 2014 to the fifth-largest economy in terms of GDP. It has outperformed countries such as the United Kingdom, France, Italy, Canada, and Brazil in the last nine years. In just 9 years, the government has turbocharged nation’s economy, turning it into a global powerhouse.
IMF forecasts for India before 2014
The International Monetary Fund, in the years 2010 and 2011, had expected the Indian economy’s growth to rise by 9.7% and 8.4% respectively. However, the body had noted the elevated levels of inflation. “With robust growth spurring elevated levels of inflation, India should speed up its return to pre-crisis monetary and fiscal policies to keep the economy in check,” the IMF suggested in the year 2011 in its annual assessment report.
Further, in the years 2013 and 2014, the IMF projected India’s economy to grow by 4.6% and 5.4% respectively. The IMF also noted that though India had restored macroeconomic and financial stability, there was a major scope to work on the structural impediments to growth and the persistently rising inflation.
Change in economic outlook after PM Modi came to power in the year 2014
A year after PM Modi came to power in India, India’s economy saw stability and an increase in the growth rate projections. The IMF, in its yearly assessment report that year, stated that the growth rate estimate was 4.6% in 2013 but in 2014 it rose to 5.4% helped by slightly stronger global growth and improved export competitiveness.
The GDP growth forecasts then increased to 7.5% in 2015-16, 7.6% in 2016-17, and 7.2% in 2017-18 driven by stronger investment following improvements to the business climate. Meanwhile, China’s economy was expected to steadily slow down to 6.6% in 2017 and 6.2% in 2018.
Recently, the International Monetary Fund (IMF) stated that India’s GDP growth rate would fall from 6.8% in 2022 to 6.1% in 2023. The IMF also forecasted that growth would accelerate to 6.8% in 2024.
PM Modi and his efforts to make India fastest-growing economy
The Indian economy’s expansion has attracted a lot of attention around the world. India has surpassed China as the fastest-growing significant economy. Notably, this has not been an easy task. Prime Minister Modi’s government has implemented several policy reforms along with public investments in hundreds of projects during the last nine years. These reforms and investments have had an unprecedented influence on important industries like agriculture, manufacturing, and services. The variety of programs, many of which have longer gestation periods, will continue to provide results over time.
Prime Minister Modi has incorporated best practices in economic management that are pragmatic and more importantly, well-suited for the country. This is indeed refreshing since for many decades India was hamstrung by ill-advised ideological paradigms that only resulted in poor growth rates and endemic poverty.
The country in the past few years witnessed unparalleled excellence in executing these economic reforms and policies. It began the direct transfer of benefits and implementation of GST, Insolvency and Bankruptcy Code (IBC), recapitalisation of public sector banks, unprecedented investments in national highways and railways, and 100% electrification. The government also ensured that, at least at the political level, there was no corruption, pilferage, or fraud. These have been some of the core secrets of the swift economic transformation we see today.
Reportedly, PM Modi’s most notable accomplishment appears to be the establishment of a favourable policy environment, infrastructure development, and large public investments that have since unleashed growth in the economy.
PM Modi’s strong determination and expertise in execution are unparalleled in India today across the political spectrum. He has given India’s political and economic class a new mantra: perform or perish. He has raised the bar for performance to a level that many in today’s political scene may not be able to live up to.
