The International Monetary Fund reduced its earlier forecast for India’s FY23 GDP from 7.4% to 6.8%.
The Indian economy’s projections made by the IMF are less optimistic than those made by the Reserve Bank of India. On September 30, the RBI lowered its predictions downward by 20 basis points, to 7 percent.
According to the IMF, India’s GDP growth will only reach 6.1% in FY24. Global growth is anticipated to be 2.7% in 2023 and 3.2% in 2022.
According to the IMF’s World Economic Outlook report, the readjusted prediction for India is based on available information on the authorities’ fiscal plans, with adjustments for the IMF staff’s assumptions.
The IMF attributed the most recent lowering of the forecast to weaker external demand and lower-than-anticipated output in the second quarter.
According to the prognosis, India would grow by 6.8% in 2022 down 0.6 percentage points from the July forecast due to a weaker-than-expected second-quarter result and more restrained foreign demand and 6.1 percent in 2023 (unchanged since July), the report stated.
This is India’s third negative revision. In July, the FY23 GDP prediction was revised downward to 7.4% from an April estimate of 8.2% in light of deteriorating external conditions and accelerating monetary policy tightening.
The April growth forecast was revised downward to 8.2% from 9% due to rising commodity prices.
This is India’s third negative revision. In July, the FY23 GDP prediction was revised downward to 7.4% from an April estimate of 8.2% in light of deteriorating external conditions and accelerating monetary policy tightening. The April growth forecast was revised downward to 8.2% from 9% due to rising commodity prices.
The most recent IMF economic forecast for India is in line with estimates from other international organisations. The World Bank cut its India prediction for 2022–2023 from 7.5% to 6.5% last week.
The research claims that economies around the world are experiencing a broad-based and more severe than anticipated recession, with inflation in many nations reaching decadal highs.
Russia’s invasion of Ukraine, tightening financial conditions in most regions, the cost-of-living problem, and the persistent COVID-19 epidemic all have a negative impact on the prognosis, the report added.
According to IMF predictions, global growth will slow from 6.0% in 2021 to 3.2% in 2022 and 2.7% in 2023. Except for the global financial crisis and the severe period of the COVID-19 epidemic, this is the worst growth profile since 2001, according to the research.
The IMF described rising pricing pressures as the biggest immediate threat to present and future prosperity in the global economy because they are reducing real earnings and jeopardising macroeconomic stability. It mentioned the attempts made by central banks to reduce these pressures by tightening policy.
However, the report issued a warning against overtightening. According to it, excessive tightening runs the risk of causing an overly severe recession in the global economy.
It also discussed the growing emerging economy debt crisis, which it claimed could have a negative impact on global growth and lead to a global recession.
