IMF raises China, India 2024 economic growth forecasts

SINGAPORE (ICIS)–The International Monetary Fund (IMF) late on Tuesday revised upwards its economic growth projections for China and India, with Asia’s emerging market economies set to remain as the main engine for the global economy.

However, prospects for the region over the next five years remain weak, largely because of waning momentum in emerging Asian economies, the IMF said in its World Economic Outlook report.

China’s economic growth projection was upgraded to 5% for 2024, up 0.4 percentage points from previous estimate made in April, while India is now expected to expand by 7%, up by 0.2 percentage points.

By 2029, however, growth in China is projected to moderate to 3.3%, well below its current pace, the IMF warned.

China’s growth forecast for 2024 was revised higher mainly due to a resurgence in private consumption and robust exports in the first quarter.

“Resurgent domestic consumption [in China] propelled the positive upside in the first quarter, aided by what looked to be a temporary surge in exports belatedly reconnecting with last year’s rise in global demand,” the IMF said.

“These developments have narrowed the output divergences somewhat across economies, as cyclical factors wane and activity becomes better aligned with its potential.”

However, China’s GDP growth is expected to moderate to 4.5% in 2025 and further decelerate by 2029, primarily due to challenges from an aging population and diminishing productivity growth.

India’s growth estimate for this year was revised upward due to the carryover effect from increased growth in 2023 and a positive outlook for private consumption, particularly in rural regions.

In Japan, despite the expectation of increased private consumption in the latter half of 2024 due to strong wage settlements, the overall growth forecast for 2024 has been revised down by 0.2 percentage points to 0.7%.

This adjustment is primarily attributed to temporary disruptions in supply chains and sluggish private investment during the first quarter.

Global growth is projected to be in line with the IMF’s April forecast, at 3.2% in 2024 and 3.3% in 2025.

Focus article by Nurluqman Suratman