Breaking: IMF Boosts India’s GDP Growth Forecast 24-25 to 7%, RBI had estimated it to be 7.2% – What This Means for Your Investments

India’s GDP Growth Forecast 24-25

Before the budget, the International Monetary Fund (IMF) has increased India’s GDP growth estimate for the financial year 2024-25 by 0.20% to 7%. At the same time, the GDP estimate for the financial year 2025-26 is 6.5%. Earlier in April, the IMF had given the same estimate for FY26.

The IMF said in its World Economic Outlook (WEO) report that the growth forecast for India has been revised to 7.0% for this year. This has been done due to better prospects for private consumption.

The World Bank had estimated GDP growth to be 6.6%

Earlier in April, the World Bank had also estimated India’s GDP growth for FY25 to be 6.6%. At the same time, the National Statistical Office (NSO) has estimated India’s GDP to grow at the rate of 8.2% in FY24.

What is GDP?

GDP is one of the most common indicators used to track the health of the economy. GDP represents the value of all goods and services produced within a country during a specific time period. It also includes goods produced by foreign companies within the country’s borders.

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There are two types of GDP

There are two types of GDP. Real GDP and Nominal GDP. In real GDP, the value of goods and services is calculated on the base year’s value or constant price. Currently, the base year for calculating GDP is 2011-12. Whereas nominal GDP is calculated on current prices.

How is GDP calculated?

A formula is used to calculate GDP. GDP=C+G+I+NX, where C stands for private consumption, G stands for government spending, I stands for investment and NX stands for net exports.

Who is responsible for the increase or decrease in GDP?

There are four important engines to increase or decrease GDP. First is you and me. Whatever you spend contributes to our economy. Second is the business growth of the private sector. It contributes 32% to GDP. Third is government expenditure.

This means how much the government is spending on producing goods and services. It contributes 11% to GDP. And the fourth is net demand. For this, India’s total exports are subtracted from total imports, because in India imports are more than exports, so its impact on GDP is negative.

RBI had estimated GDP growth to be 7.2%

Last month, RBI had raised India’s GDP growth forecast for FY25 to 7.2%. Last month, the World Bank maintained India’s GDP forecast for FY2024-25 at 6.6%

RBI Esimated GDP Growth from 7% to 7.2% For FY24-25