The International Monetary Fund (IMF) expects India to increase its contribution to global growth over the next five years as the economy continues to grow fairly rapidly, as per Bloomberg. According to the report, Krishna Srinivasan, director of the Asia and Pacific Department of IMF, has said India will likely account for 18 per cent of world growth by 2028, up from 16 per cent currently.
India’s faster growth compared with China’s economic slowdown could see the South Asian nation make a bigger contribution to global growth than its larger rival, only temporarily, the latest IMF figures show.
However, in terms of the size of their economies, China remains dominant. Based on the latest estimates from the IMF, China’s nominal gross domestic product will increase to $23.61 trillion by 2028, while India’s will reach $5.94 trillion. China and India will jointly contribute about half of world growth in both 2023 and 2024, IMF figures show.
HSBC economists Frederic Neumann and Justin Feng said in a report last week that India is far from matching China’s contribution to the world economy, based on the size of the two economies and their share of global investment and consumption.
In it’s latest World Economic Outlook report released in first week of October, the international body said that India’s GDP is projected to grow by 6.3 per cent in the current fiscal year, up by 20 basis points to it’s last forecast in July. The IMF hiked it’s 2023-24 India GDP growth forecast, making this the second hike in three months. This outlook took India’s GDP growth rate closer to the 6.5 per cent number predicted by the Indian authorities.
The IMF didn’t make any changes to it’s outlook for the next year and maintained a GDP growth rate of 6.3 per cent for India for the fiscal year 2024-25. In it’s report, the body noted, “Growth in India is projected to remain strong, at 6.3 percent in both 2023 and 2024, with an upward revision of 0.2 percentage point for 2023, reflecting stronger-than-expected consumption during April-June.”