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World Economic Outlook (WEO) Report 2025

Context

The International Monetary Fund (IMF), through its World Economic Outlook (WEO) April 2025 report, has projected that India will remain the fastest-growing major economy in the world in 2025 and 2026. The growth rate is expected to be 6.2% in 2025 and 6.3% in 2026.

This is higher than global growth, which is projected at 8% in 2025 and 3.0% in 2026.
In contrast, China's growth is estimated at just 4% in 2025, and the US economy is expected to grow by 1.8%.

What is supporting India’s Growth?

Strong Private Consumption, especially in rural areas, is one of the key drivers. This shows a broad-based economic recovery.
Government reforms and public investments in infrastructure, digital connectivity, and welfare delivery have also strengthened resilience.
India’s focus on financial inclusion, startup ecosystems, and manufacturing-led exports (like electronics and semiconductors) are beginning to pay off.
The banking sector is relatively healthier today (lower NPAs, better credit growth), which helps finance economic activity.

What challenges Does India Face?

While the IMF outlook is positive, it's important to understand that the path ahead is not without risk:

Global Trade Tensions: As the WEO notes, there is a rise in tariffs and trade barriers India is not immune, especially as it aspires to increase exports.
Climate and Resource Stresses: Water stress, urban pollution, and extreme weather events may increasingly affect agriculture, health, and productivity.
Employment Quality: While growth is high, employment generation, especially quality formal jobs, has to match the pace. Informal employment remains high.
Fiscal Management: Sustaining growth with balanced fiscal health is a challenge. Public investment needs to be maintained without causing unsustainable debt.

IMF’s World Economic Outlook (WEO)

The World Economic Outlook (WEO) is a flagship publication of the International Monetary Fund (IMF).
It provides a detailed analysis of:
- Global economic trends and forecasts,
- Risks to economic stability,
- Growth projections for countries,
- Key policy recommendations.
It is published twice a year (usually in April and October), with interim updates in January and July.
The WEO helps countries, policymakers, investors, and scholars understand how global and regional economies are performing — and where they're headed.
Coverage
- Growth Projections: GDP forecasts for advanced, emerging, and developing economies.
- Inflation Trends: Estimates and drivers of price rise across economies.
- Policy Challenges: Analysis of monetary, fiscal, and trade policy responses.
- Risks and Uncertainty: From geopolitical tensions to financial volatility.
- Sectoral Insights: On trade, capital flows, debt, employment, climate economy, etc.

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World Economic Outlook (WEO) Report 2025

What is supporting India’s Growth?

What challenges Does India Face?

IMF’s World Economic Outlook (WEO)