Wednesday, March 22, 2023

IMF cuts India’s GDP forecast to 6.8%


The International Monetary Fund (IMF) on Tuesday slashed India’s economic growth forecast to 6.8% for 2022.
This is a steep cut in comparison to its previous forecast of 7.4%, that it had given out in July.
In its latest annual World Economic Outlook report released on Tuesday, the IMF said outlook has been slashed reflecting a weaker-than-expected outturn in the second quarter and more subdued external demand.
For the next year 2023, India has been projected to grow at 6.1%.
Last week, the World Bank also downgraded India’s growth forecast to 6.5% for fiscal year 2022-23, a drop of 1% from its previous June 2022 projection. It cited deteriorating international environment as the reason behind the cut in GDP.
However, World Bank chief economist of South Asia Hans Timmer had also said that India has done relatively well compared to other countries in South Asia.
“India is doing better than the rest of the world. There are more buffers in India, especially large reserves at the central bank. That’s very helpful,” he had said.
Timmer had also praised the government of India for very actively reacting to the Covid crisis.
The projections of both IMF and World Bank are, however, lower than the Reserve Bank of India’s (RBI) forecast of 7.2% GDP growth in FY23.
Announcing the 3rd monetary policy of FY23 on September 30, RBI’s monetary policy committee (MPC) retained its GDP growth forecast at 7.2% for the current fiscal year. But, it did caution against negative spillovers of geopolitical tensions and a slowdown in global economy.
RBI retains FY23 GDP forecast at 7.2%; cautions against negative global spillovers
‘The worst is yet to come’
IANS: The International Monetary Fund (IMF) has predicted a tough 2023 as it cut growth predictions and forecast economic contraction in a third of the world, media reports said.
“The worst is yet to come”, the global financial institution’s World Economic Outlook report said, Sky News reported.
“For many people, 2023 will feel like a recession”, it said.
A downward revision of the global growth rate for 2023, from the amount the IMF said it expected in July, has been made in the report, Sky News reported.
Now, 2.7 per cent growth is expected next year. It’s down from the 6 per cent growth experienced last year and the 3.2 per cent growth forecast for this year.
This is the “weakest growth profile” since 2001, excluding the acute phase of Covid-19 pandemic and the global financial crisis, the IMF said, Sky News reported.
It reflects “significant slowdowns” for the largest economies as America’s gross domestic product (GDP) contracted in the first half of 2022, followed by the Euro area’s contraction in the second half of 2022, and prolonged Covid-19 outbreaks and lockdowns in China with a growing property sector crisis.
“The world is in a volatile period: economic, geopolitical, and ecological changes all impact the global outlook,” the report says. About a third of the world economy faces two consecutive quarters of negative growth, the IMF also forecast, Sky News reported.


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