The International Monetary Fund (IMF) released its World Economic Outlook (April 2025 edition) projecting a downward revision in global growth. Global GDP growth is forecasted at 2.8% in 2025 (down 0.5 percentage points from January 2025) and 3% in 2026 (down 0.3 percentage points).
Despite global challenges, India is projected to be the world’s fastest-growing major economy, currently tied with Japan at 4th place in global GDP rankings.
Key Highlights of Report
Global Economy:
- Global economy showing stability but underwhelming growth amid trade war tensions and US tariffs.
- Growth in Euro area projected at 0.8%, declining 0.2 percentage points.
- Emerging markets and developing economies: projected growth at 3.7% in 2025.
United States:
- Remains world’s largest economy.
- 2025 GDP projected at $30.34 trillion.
- Growth forecast slows to 1.8% (down 0.9 percentage points) due to policy uncertainty, trade tensions, weakening demand.
China:
- 2nd largest economy.
- 2025 GDP projected at $19.53 trillion.
- Growth forecast at 4.6%.
India:
- Presently 4th largest economy (on par with Japan).
- 2025 GDP projected at $4.39 trillion.
- Growth forecast revised down from 6.5% to 6.2% for 2025, and maintained at 6.2% for 2026.
- Growth supported by private consumption, especially in rural areas.
- Projected to overtake Germany and Japan to become 3rd largest economy by 2030.
Top 10 Largest Economies by GDP, 2025: IMF
| Rank | Country | GDP (USD trillion) | Projected Real GDP Growth (%) | GDP Per Capita (USD) |
| 1 | USA | 30.34 | 2.70% | 30,510 |
| 2 | China | 19.53 | 4.60% | 19,230 |
| 3 | Germany | 4.92 | 0.80% | 4,740 |
| 4 | India | 4.39 | 1.10% | 4,190 |
| 5 | Japan | 4.27 | 6.50% | 4,190 |
| 6 | UK | 3.73 | 1.60% | 3,840 |
| 7 | France | 3.28 | 0.80% | 3,210 |
| 8 | Italy | 2.46 | 0.70% | 2,420 |
| 9 | Canada | 2.33 | 2.00% | 2,230 |
| 10 | Brazil | 2.31 | 2.20% | 2,130 |
What is GDP?
- Gross Domestic Product (GDP): Total market value of all final goods and services produced within a country’s borders in a specific time period (usually a year).
- Difference from GNP: GDP counts production within domestic territory; Gross National Product (GNP) counts production by nationals regardless of location.
Types of GDP:
- Nominal GDP: Measured at current market prices (includes inflation).
- Real GDP: Inflation-adjusted measure reflecting actual production volume.
GDP Calculation in India: Estimated by Central Statistical Office (CSO) using:
- Economic activity (factor cost): Excludes taxes.
- Expenditure (market prices): Includes taxes.
Sectoral contributions to India’s GDP:
- Services sector: 61.5%
- Industry: 23%
- Agriculture: 15.4%
About World Economic Outlook (WEO):
- Published twice a year (April & October) by IMF; updates in January and July.
- Covers global forecasts for GDP growth, inflation, current account balances, unemployment across IMF’s 190 member countries.
- Involves analysis of major global economic trends and policy issues.
About International Monetary Fund (IMF)
Establishment:
- Founded in 1944 at the Bretton Woods Conference (New Hampshire, USA).
- Officially came into existence on 27 December 1945.
- Began financial operations in March 1947.
Headquarters: Washington, D.C., United States
Current Managing Director (as of 2025): Kristalina Georgieva (since October 2019)
Membership: 190 member countries (India is a founding member)
Facts:
- The IMF is sometimes called the “lender of last resort” for countries.
- IMF’s lending has conditions (conditionalities) requiring economic reforms by borrower countries.
- Special Drawing Rights (SDR) is the IMF’s international reserve asset.
Key Functions of IMF:
- Surveillance: Monitors global economic trends, exchange rates, and member economies.
- Financial Assistance: Provides loans to countries facing balance of payments crises (e.g., Stand-By Arrangements, Extended Fund Facility).
- Capacity Development: Offers technical assistance and training to help countries strengthen economic management.
- Policy Advice: Guides countries on fiscal, monetary, and structural policies.
IMF’s Reports:
The IMF regularly publishes important reports, including:
- World Economic Outlook (WEO) – Global growth, inflation, GDP forecasts (published April & October).
- Global Financial Stability Report (GFSR) – Financial system stability analysis.
- Fiscal Monitor – Fiscal policy developments globally.