New Delhi: The International Monetary Fund (IMF) has slashed India’s economic growth forecast to 9 per cent for the current financial year ending March 31.
The Washington-based IMF has thus joined several agencies that have downgraded their estimates over concerns over the impact of the spread of the new version of the coronavirus on business activity and mobility, reports PTI.
In its latest report on the World Economic Outlook on Tuesday, the IMF, which had forecast GDP growth for India at 9.5 per cent in October last year, has set a forecast for the next fiscal year 2013 (April 2022 to March 2023) at 7.1 per cent. kept. In the financial year 2020-21, the Indian economy had declined by 7.3 percent.
The IMF’s forecast for the current fiscal is lower than the 9.2 per cent projected by the government’s Central Statistics Office and 9.5 per cent by the Reserve Bank of India.
Its forecast is lower than the S&P’s 9.5 per cent and Moody’s 9.3 per cent. However, higher than the estimates of 8.3 per cent by the World Bank and 8.4 per cent by Fitch.
According to the IMF, India’s prospects for 2023 have been marked by expected improvements in credit growth and, subsequently, investment and consumption, better-than-expected performance of the financial sector.
The IMF said global growth is expected to shrink from 5.9 per cent in 2021 to 4.4 per cent in 2022, half a percentage point lower for 2022 than the October WEO, largely bucking forecast markdowns in the two largest economies, the US and China. it shows.
“Although this is 0.2 percent higher than the previous forecast, the upgrade largely reflects the mechanical pickup following the current drag on growth in the second half of 2022. The forecast is conditional on adverse health outcomes that fall to low levels in most countries. by the end of 2022, assuming that worldwide vaccination rates improve and treatments become more effective,” the report said.
It added that a revised assumption of the removal of the Build Back Better fiscal policy package from baseline, a return to earlier monetary housing, and continued shortages of supply produced a 1.2 percentage-point revision for the United States.
In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and prolonged financial stress among property developers have driven a 0.8 percentage-point decline.
Global growth is expected to slow to 3.8 percent in 2023.
In a blog post, IMF Chief Economist Gita Gopinath wrote that sustained global recovery is facing many challenges as the pandemic enters its third year. He said that the rapid spread of omicron Diversity has led to renewed mobility restrictions and labor shortages in many countries.
Gopinath wrote that supply disruptions still weigh on activity and are contributing to higher inflation, compounded by pressure from strong demand and higher food and energy prices.
With inputs from PTI
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