Indian Economy / India's path will not be easy, IMF-World Bank made such predictions

According to the latest report of IMF and World Bank, India's economic growth can be 6.5% in the financial year 2025-26. Slowdown in industrial activities and global recession are the main reasons. Global growth rate is estimated to be 3.3%. Government policies can strengthen the service and manufacturing sectors.

Vikrant Shekhawat : Jan 18, 2025, 06:00 AM
Indian Economy: The country's economy is going to face many challenges in the next few years. The estimate of economic growth rate being less than 7% in the financial year 2025 and 2026 has made these years even more important. The latest reports of the International Monetary Fund (IMF) and the World Bank have strengthened this prediction. According to these reports, there are clear signs of slowing economic growth in India.

IMF report: Impact of decline in industrial activity

The IMF has said in its World Economic Outlook (WEO) report that India's economic growth has slowed down due to a greater than expected decline in industrial activity. According to the IMF, after achieving a growth rate of 8.2% in 2023, it came down to 6.5% in 2024. It is also projected to remain stable at 6.5% in 2025 and 2026.

The report also mentions that the main reason behind the economic slowdown is the decline in industrial production and fluctuations in the global economic situation. However, the IMF has described it as in line with the potential growth rate.

Stagnation and slowdown of the global economy

There is no special sign of growth in the global economy either. According to the IMF, the global growth rate is estimated to be 3.3% in 2025 and 2026, which is lower than the historical average (3.7%). The global inflation rate is also expected to be 4.2% in 2025 and 3.5% in 2026.

In particular, stability is expected in the economies of big countries like the US and China. The growth rate in the US is estimated to be 2.7% in 2025, while China may grow at a rate of 4.5%.

World Bank Outlook: Hopeful prospects in India

The World Bank has seen India as a strong growth region. According to this, the growth rate in South Asia can reach 6.2% in the financial year 2025-26. India is projected to grow at 6.7% over the next two fiscal years.

In particular, expansion in the services sector and manufacturing activities is expected to drive economic strength. Government reform measures, such as improving the business environment and investment incentive schemes, will help boost these sectors.

Future challenges and solutions

The major reasons for India's slowdown in economic growth include lack of industrial production, slowdown in investment, and global uncertainty. However, both the World Bank and the IMF have suggested that these challenges can be addressed through the right policy measures.

The government should:

Implement new schemes to boost industrial production.

Provide policy concessions to increase private investment.

Focus on the services and manufacturing sectors.

Maintain strong links with global markets.

Conclusion

India's economic growth will be on a challenging path in FY 2025 and 2026. But the country's fundamental economic structure and the positive impact of government policies can ensure long-term growth. Although the reports of IMF and World Bank point to a slowdown, it is also clear that if efforts are made in the right direction, India can overcome these challenges and achieve economic stability.