Last Update: April 12, 2023, 05:01 AM IST
FILE PHOTO: Logo of the International Monetary Fund (IMF) in Washington, the United States, September 4, 2018. Reuters/Yuri Gripas/File photo
The IMF also cut the forecast for fiscal year 2024-25 (April 2024 to March 2025) to 6.3 per cent from 6.8 per cent in January this year.
The International Monetary Fund (IMF) on Tuesday cut India’s economic growth forecast for the current financial year to 5.9 per cent from 6.1 per cent earlier. Nevertheless, India will remain the fastest growing economy in the world.
In its annual World Economic Outlook, the IMF also cut its forecast for 2024-25 fiscal year (April 2024 to March 2025) to 6.3 per cent from 6.8 per cent in January this year.
The growth rate of 5.9 percent in the 2023-24 financial year is compared to the estimated 6.8 percent in the previous year.
The IMF growth estimate is lower than the Reserve Bank of India’s (RBI) estimate. The RBI sees 7 per cent GDP growth in 2022-23 and 6.4 per cent in the current fiscal year beginning April 1.
The government is yet to release the full year GDP figures for 2022-23.
Data from the World Economic Outlook shows that India remains the fastest growing economy in the world, despite a significant downgrade in growth rate projections in 2022 from 6.8 per cent to 5.9 per cent.
China’s growth rate is estimated to be 5.2 percent in 2023 and 4.5 percent in 2024, compared to 3 percent in 2022.
On the surface, the global economy appears poised to slowly recover from the powerful shockwaves of the pandemic and Russia’s unprovoked war on Ukraine. China is making a strong comeback after reopening its economy. IMF chief economist Pierre-Olivier Gaurinchas said supply-chain disruptions were easing, while war-caused disruption to energy and food markets was easing.
“Simultaneously, the large-scale and synchronous tightening of monetary policy by most central banks should begin to bear fruit, with inflation moving back towards its targets.
“In our latest forecast, global growth will slow to less than 2.8 percent this year before picking up modestly to 3.0 percent in 2024. year and 4.9 per cent in 2024,” he said.
According to him, this year’s economic slowdown is concentrated in advanced economies, especially the euro area and the United Kingdom, where growth is expected to fall to 0.8 percent and -0.3 percent this year before rebounding to 1.4 and 1 percent, respectively. ,
In contrast, despite the 0.5 percentage point downward revision many emerging market and developing economies are picking up, year-over-year growth is projected to increase from 2.8 percent in 2022 to 4.5 percent in 2023, he said in a blog post. It is written in
Gaurinchas has argued that policymakers need a steady hand and clear communication more than ever. With financial volatility contained, monetary policy should focus on bringing down inflation, but be prepared to adjust quickly to financial developments.
“One silver lining is that the banking turmoil will help slow overall activity as banks cut back on lending. By itself, this should partially reduce the need for further monetary tightening to achieve the same policy stance.
“But any expectation that central banks will prematurely surrender the inflation battle will have the opposite effect: lowering yields, supporting activity beyond what is warranted and ultimately complicating the task of monetary authorities,” he said.
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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
