IMF cuts India’s growth forecast for 2022-23 to 6.8 percent
The International Monetary Fund (IMF) on Tuesday slashed India’s economic growth forecast to 6.8% in its latest World Economic Outlook. It was estimated at 7.4 per cent in July. Citing external factors and weaker-than-expected second quarter growth, the IMF has said that the situation may get worse now.
The IMF has said that the global economy is facing several challenges including inflation tightening monetary policies, Russia’s invasion of Ukraine and the COVID-19 pandemic. The report said inflation is likely to remain sustained for a long time due to the rise in energy and food prices. The tightening of monetary policies could intensify the debt crisis of emerging markets.
India’s growth rate estimated to remain low
The agency has retained India’s growth forecast for 2022-23 despite the downside risk. The IMF has said in its ‘World Economic Outlook: Countering the Cost-of-Living Crisis’ that our estimate for India is 6.8%. It’s down 0.6 percent since its July forecast.
Although India will remain one of the fastest growing major economies in the world in 2022 and 2023, despite the decline in growth forecast. China’s growth is projected to slow to 3.2 percent in 2022 and to 4.4 percent in 2023.
How much will inflation be?
The International Monetary Fund (IMF) has said that inflation in India is projected to be 6.8 per cent in 2022-23, which may come down to 5.1 per cent in 2023-24. The IMF says the tightening of monetary and fiscal policies is weakening demand and policymakers are currently aiming to bring inflation within the tolerance band.
What is the status of global development
The IMF expects global growth to remain unchanged at 3.2 in 2022. That is, there will be no change in the growth rate of the world this year. However, it is expected to slow to 2.7 per cent in 2023, which is 0.2 per cent lower than the July forecast. The IMF has said that there is also a 25 percent chance that it could fall below 2 percent. The IMF has cautioned that the risks to the economic outlook are unusually large and may lead to a downward trend in growth.
