The International Monetary Fund (IMF) on Friday said that economic growth in India has slowed more than expected due to a sharper-than-expected decline in industrial activity and is projected to remain at 6.5 percent by 2026. "Growth in India has slowed more than expected due to a sharper-than-expected decline in industrial activity," the IMF said in its updated World Economic Outlook (WEO) report. According to the report, the global economy remains stagnant. India's growth rate was 8.2 percent in the year 2023, which will decline to 6.5 percent in 2024.

Global growth also declined

Global growth is projected to be 3.3 per cent in 2025 and 2026, lower than the historical (2000-19) average of 3.7 per cent. The forecast for 2025 is broadly unchanged from the October 2024 report. Growth in the US is driven mainly by a decline in other major economies. It said global aggregate (headline) inflation is expected to decline to 4.2 per cent in 2025 and 3.5 per cent in 2026. It will reach the target earlier in developed economies than in emerging markets and developing economies. According to the IMF report, global growth is projected to remain stable, although it will be slow. The report said underlying demand in the US remains strong, reflecting strong wealth effects, less restrictive monetary policy stance and favourable financial conditions.

India's growth rate was 8.2 percent in 2023

The IMF said, "India's growth rate is projected to be 6.5 percent in 2025 and 2026, as projected in October, and this is in line with potential growth." It said that India's growth rate was 8. 2 percent in 2023, which fell to 6.5 percent in 2024. It is also projected to remain the same in 2025 and 2026. IMF Chief Economist Pierre-Olivier Gourinchas said that a decline in inflation to 4.2 percent this year and 3.5 percent next year would help mitigate the global turmoil in recent years, including the Kovid pandemic and Russia's invasion of Ukraine. These led to the biggest increase in inflation in four decades. China is now projected to grow at 4.5 percent next year, 0.4 percentage points higher than previously forecast.