IMF bumps up India's 2023 growth projection to 6.1

Washington, July 25

The International Monetary fund on Tuesday projected that the Indian economy will grow by 6.1 per cent in 2023, which is 0.2 points — 20 basis percentage points — higher than its April forecast.

The fund attributed the upwardly revised projection to “stronger domestic investment”.

The forecast for 2024 remained unchanged at 6.4 per cent.

The fund also said the Chinese recovery from Covid-19 related restrictions and lockdown is "losing steam" after showing a big boost in February and March.

The forecast for the Chinese economy remained unchanged — 5.2 per cent for 2023 and 4.5 per cent for 2024.

Titled “Near-Term Resilience, Persistent Challenges”, the fund’s new World Economic Outlook report said the the global economic growth will fall from the 2022 level of 3.5 to 3 per cent in both 2023 and 2024, although the new projection was marginally higher than the one issued by the fund in April.

The report said anti-inflationary rate hikes ordered by authorities around the world as "continues to weigh on economic activity".

"Global headline inflation is expected to fall from 8.7 per cent in 2022 to 6.8 per cent in 2023 and 5.2 per cent in 2024," it said, adding: "Underlying (core) inflation is projected to decline more gradually, and forecasts for inflation in 2024 have been revised upward".

The resolution of the US debt ceiling issue and strong acton by authorities to tackled turbulence in the financial sector in the US and Switzerland — the crash of Silicon Valley Bank, Signature Bank, and the First Republic Bank in the US and Credit Suisse in Switzerland — “This moderated adverse risks to the outlook”.

But the find warned that challenges remained: "Inflation could remain high and even rise if further shocks occur, including those from an intensification of the war in Ukraine and extreme weather-related events, triggering more restrictive monetary policy."