World Economic Outlook (WEO)

GS3 – Indian Economy

Context:

The International Monetary Fund (IMF), in its latest World Economic Outlook, has downgraded growth projections for many countries, including India.

Key Insights:

• Global Growth Forecast: The IMF has lowered its global growth estimate, reducing it by 0.5 percentage points to 2.8% for 2025, and by 0.3 percentage points to 3% for 2026 compared to its January predictions.
• Growth Challenges: A sharp rise in trade tensions coupled with significant policy uncertainty are cited as major obstacles to global economic momentum.
• Policy Advice: The IMF urges nations to collaborate in creating a stable, predictable trade environment and to strengthen international cooperation while addressing internal policy shortcomings and structural weaknesses.

India-Specific Observations:

• India’s GDP growth forecast for 2025-26 has been revised downward by 0.3 percentage points to 6.2%, from the earlier 6.5%.
• For 2026-27, growth is expected to be 6.3%, slightly down by 0.2 percentage points from the earlier projection of 6.1%.
• Despite the downward revisions, India’s economy remains relatively resilient, driven largely by strong private consumption, especially in rural regions.

About the World Economic Outlook (WEO):

• The WEO is a report prepared by IMF staff, typically published twice a year.
• It offers detailed analysis and forecasts for the global economy, assessing prospects and policy challenges over the short to medium term.