IMF projection: Global growth at mere 2.7 per cent in 2023, India's at 6.1 per cent
India has been doing very well in 2022 and is expected to grow fairly robustly in 2023, International Monetary Fund Chief Economist Pierre-Olivier Gourinchas said.
FollowThe International Monetary Fund has said that India's economy is doing fairly well but would require additional monetary tightening. IMF Chief Economist Pierre-Olivier Gourinchas informed that the global lender had trimmed its projection of India's economic growth in 2022 to 6.8 per cent.
In its annual World Economic Outlook report, the IMF has downgraded India's projected 2022 growth by 0.6 percentage points since the July forecast to 6.8 per cent. The revised projections reflect a more subdued external demand and a weaker-than-expected outturn in the second quarter.
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India had grown at 8.7 per cent in the 2021-22 fiscal; India has been doing very well in 2022 and is expected to grow fairly robustly in 2023, Gourinchas told media persons, adding that the IMF expects the country to grow at 6.8 per cent this year and 6.1 per cent the following year.
The IMF Chief Economist said that the downward revision in 2022 is on account of tighter financial conditions and mostly due to the external outlook. Besides, the growth revision for the fiscal's first quarter was weaker than previously expected.
Gourinchas noted that inflation in India is still above the central bank target. He said that inflation in India, which is expected to be at 6.9 per cent in 2022-2023, may reduce to 5.1 per cent in 2023-2024. Therefore, the IMF believes that the overall policy stance -- fiscal and monetary -- should most likely be on the tightening side.
According to Daniel Leigh, division chief of the IMF's Research Department, in 2023-2024, inflation is expected to return towards the four per cent mark due to additional monetary tightening measures.
Overall, global growth is forecast to slow from six per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023. According to the IMF, this is the weakest growth profile since 2001, except for the acute phase of the COVID-19 pandemic and global financial crisis.
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