Ajit Karn
Tuesday, the chief of a division at the IMF, Daniel Leigh, expressed confidence in the Indian economy, stating that it is “very strong.”
IMF division chief Daniel Leigh stated that India is currently one of the global economy’s bright areas due to its high growth rate.
Yes, the projected growth rate for India in 2022 is 6.8 percent. Let us not overlook that this is currently one of the bright spots in the global economy. Such a high growth rate is moderating down to 5.9 with a -.2 revision compared to January; what is occurring here is a series of historical revisions, according to Leigh.
IMF on Tuesday lowered its growth projection for 2023-24 to 5.9% from 6.1% previously, but despite a significant decline, India remains the fastest-growing economy in the world, according to the World Economic Outlook.
“We recognize that 2020-2021 has been significantly better than anticipated, so there is less room to catch up. And as a result, the pent-up demand from consumers that informed our previous forecast will be lower because they’ve had more time to catch up in the past. This is the reason for the downward revision this year. Then we rise to 6.3% again the following year, a very robust economy that is necessary for India to continue to converge towards higher living standards and create the necessary employment, added leigh.
The IMF forecasts that India’s inflation will decrease to 4.9% this fiscal year and to 4.4% the following year.
The IMF’s development forecast is lower than that of the Reserve Bank of India (RBI). The central bank predicted 7% GDP growth for FY 2022-23 and 6.4% for the current fiscal year, which began on April 1.
In the meantime, the international lender expressed concern over inflation, debt, and the threats posed by rising interest rates to the financial sector. It warned that if banks reduce lending further, global output will decrease by an additional 0.3% in 2023.
“Despite the boost from lower food and energy prices and improved supply-chain functioning, downside risks are substantial as a result of the recent turmoil in the financial sector,” the report states.
The IMF forecasts that growth will level out at 2.8% in 2023 before rising to 3% in 2024. For the remainder of the year, inflation is projected to remain elevated at 7%, before declining to 4.9% the following year.
In 2023 and 2024, China’s growth rate is projected to be 5.2% and 4.5%, respectively, compared to its growth rate of 3% in 2022.
Growth projections for 2023 are 1.6% for the United States, 0.7% for France, and a dismal -0.1% and -0.7% for Germany and the United Kingdom, respectively.
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Despite the lingering COVID pandemic and constricting financial conditions caused by the ongoing Russia-Ukraine conflict, the majority of nations will avoid recession in 2023.
