The International Monetary Fund (IMF) has cut India's economic growth rate (GDP growth) forecast. According to the IMF's World Economic Outlook report of April 2025, India's GDP growth is now estimated to be 6.2 percent in 2025, which was earlier stated as 6.5 percent in the January 2025 report. According to the IMF, this revision has been done due to increasing uncertainty globally and America's new trade policies, especially the tariffs imposed by President Donald Trump.
Bad news for the global economy too
The report said that India's economic situation remains relatively stable, mainly due to growing private consumption in rural areas. However, global trade tensions and uncertainties have affected India's potential growth, causing the growth rate to decline by 0.3 percentage points.
The IMF has made a big cut in the growth forecast not only for India but also for the entire global economy. Now global GDP growth is expected to be only 2.8 percent in 2025, which is half a percent less than the earlier estimate.
America and China will also suffer losses
The US growth rate has been reduced from 2.7 percent to 1.8 percent, while China's GDP growth is now estimated to be 4.0 percent from 4.6 percent. The IMF also said that China's growth forecast for 2026 has also been reduced from 4.5 percent to 4.0 percent.
The IMF report clearly warns that the tariffs and rapid changes in trade policies announced by the US in the last few months are posing a major risk to the global economy. The report says that the world is moving out of the economic system that was in place for the last 80 years. Old rules are being challenged and new rules have not yet come into existence.
India needs to strike a balance
In the context of India, the IMF stressed that although there is some stability in domestic demand and rural economy, there is a need to remain cautious to deal with global uncertainties. In the coming times, India will have to keep in mind the global conditions while balancing its economic policies.
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