IMF Highlights India’s Growing Role in Global Manufacturing
The International Monetary Fund (IMF) has released its latest World Economic Outlook report, revealing a significant shift in global manufacturing towards emerging markets such as India and China. This change comes as advanced economies face a decline in competitiveness. The report emphasizes that India and China are becoming key players in the global manufacturing landscape.
According to the IMF, there is also a noticeable shift in consumer behavior from goods to services, which is boosting the services sector in both advanced and emerging markets. However, this shift is causing a slowdown in manufacturing activity, leading to a rebalancing between these two sectors.
For India, the IMF projects a GDP growth of 7% in 2024, down from 8.2% in 2023. The report attributes this moderation to the exhaustion of pent-up demand accumulated during the pandemic. As the economy stabilizes, growth is expected to continue at 6.5% in 2025.
Globally, the IMF notes that GDP growth has been steady at around 3% in the short and medium term, with little change since its April 2024 report. The IMF warns that this weak growth may persist, suggesting a long-term reduction in potential growth due to the pandemic.
The report highlights the challenges faced by advanced economies and the opportunities for emerging markets like India and China to strengthen their positions in global manufacturing.
Doubts Revealed
IMF -: IMF stands for International Monetary Fund. It is an organization that helps countries by providing financial advice and support to ensure economic stability around the world.
Global Manufacturing -: Global manufacturing refers to the production of goods on a worldwide scale. It involves making products in different countries and then selling them internationally.
Emerging Markets -: Emerging markets are countries that are becoming more advanced economically. They are growing quickly and are starting to have more influence in the world economy, like India and China.
Advanced Economies -: Advanced economies are countries with high levels of income and industrialization. They have well-developed infrastructure and technology, like the United States and Germany.
Competitiveness -: Competitiveness refers to a country’s ability to produce goods and services that meet international market standards while maintaining or increasing the income of its people.
Consumer Behavior -: Consumer behavior is how people decide to spend their money on goods and services. It includes what they buy, why they buy it, and how often they buy it.
GDP Growth -: GDP growth is the increase in the value of all goods and services produced in a country over a period of time. It is a measure of economic health and progress.
Pandemic -: A pandemic is a global outbreak of a disease that affects a large number of people. The COVID-19 pandemic is an example, which has impacted economies worldwide.
