One of the bright spots in the global economy right now: IMF hails India’s growth

One of the bright spots in the global economy right now: IMF hails India's growth

The IMF expects inflation in India to slow to 4.9% in the current year.


International Monetary Fund Division Chief Daniel Leigh on Tuesday expressed confidence in India’s economy and said it was a “very strong economy”.

He said that India is currently one of the strong points in the global economy with a high growth rate.

“Yes, we have a growth rate for India which is 6.8 in 2022. Let’s not forget that this is one of the bright spots in the global economy right now. Such a high growth rate and it’s moderating to 5.9 with a -0.2 revision from January, what’s happening here is also a set of historical revisions,” Leigh said.

The IMF on Tuesday lowered its growth projection for 2023-2024 to 5.9% from 6.1% previously, but despite a significant drop, India continues to be the fastest growing economy in the world, revealed figures from the World Economic Outlook.

“We realize 2020-21 has actually been a lot better than we thought and so actually there is less room to catch up. And that pent-up consumer demand that informed our previous forecast is therefore going to be less because they’ve already had more catch-up before. This is why there is a downward revision this year. Then we will go back up to 6.3 next year, a very strong economy which is needed to allow India to continue to converge towards higher living standards and create needed jobs,” added Leigh.

The IMF expects inflation in India to slow to 4.9% in the current year and 4.4% in the next fiscal year.

IMF growth forecasts are lower than those of the Reserve Bank of India (RBI). The central bank forecast GDP growth of 7% for the 2022-23 fiscal year and 6.4% for the current fiscal year which started on April 1.

Meanwhile, the international lender flagged concerns about inflation, debt and risks to the financial sector from rising interest rates. He warned that if banks reduced their lending further, global output would fall another 0.3 percentage points in 2023.

“Despite the whiplash from lower food and energy prices and improved supply chain functioning, risks are firm on the downside with heightened uncertainty from recent sector turmoil. financial,” the report said.

The IMF expects growth to bottom out at 2.8% in 2023, rising to 3% in 2024. Inflation is expected to remain high at 7% for the rest of the year, before falling back to 4.9% l ‘next year.

China’s growth rate is expected to be 5.2% in 2023 and 4.5% in 2024, compared to a growth rate of 3% in 2022.
The US growth forecast for 2023 is 1.6%, France’s 0.7%, while Germany and the UK are at -0.1% and -0.7 respectively. %.

Most countries, however, will avoid recession in 2023 despite the persistence of the COVID pandemic and tightening financing conditions as the Russian-Ukrainian war continues.

(Except for the title, this story has not been edited by NDTV staff and is published from a syndicated feed.)

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