IMF Cuts India GDP Growth Forecast For FY23
The IMF now sees India GDP growth at 7.4% in FY23, in line with the RBI’s forecast.
The International Monetary Fund has cut India’s growth forecast for the ongoing financial year, as it slashed its global growth outlook.
The fund has cut India’s growth forecast by 80 basis points to 7.4%. This is slightly higher than the Reserve Bank of India’s growth forecast of 7.2% for the current year.
The IMF expects global growth to slow to 3.2% this year and 2.9% next year, downgrades of 0.4 and 0.7 percentage points from April. Downgrades for China and the United States, as well as for India, are driving the downward revisions to global growth during 2022–23, it said.
“The global economy, still reeling from the pandemic and Russia’s invasion of Ukraine, is facing an increasingly gloomy and uncertain outlook. Many of the downside risks flagged in our April World Economic Outlook have begun to materialise,” the IMF said in its update.
According to the fund, higher-than-expected inflation, especially in the United States and major European economies, is triggering a tightening of global financial conditions. Also, China’s slowdown has been worse than anticipated amid Covid-19 outbreaks and lockdowns, the IMF said, adding that there have been further negative spillovers from the war in Ukraine.
“The outlook has darkened significantly since April,” the IMF cautioned. “The world may soon be teetering on the edge of a global recession, only two years after the last one.”
