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BUSINESS EYE APRIL 21, 2023 | The Indian Eye 30

Amid outlook of global downturn, IMF

predicts high growth of Indian economy

IMF growth forecast is lower than the Reserve Bank of India (RBI) projection. The central bank predicted

7 per cent GDP growth for FY 2022-23 and 6.4 per cent in the ongoing fiscal that started on April 1

OUR BUREAU
Washington, DC

he International Monetary
Fund (IMF) in its flagship
TWorld Economic Outlook
projected that India will be the fast-
est growing economy in the world
amid financial sector turmoil, high
inflation, ongoing effects of the Rus-
sia-Ukraine war, and three years of
COVID.
IMF on Tuesday lowered its
growth projection for 2023-24 to 5.9
per cent from 6.1 per cent earlier but
despite a significant drop, India con-
tinues to be the fastest-growing econ-
omy in the world, the World Econom-
ic Outlook figures revealed. The IMF
projects India’s inflation to slow to
4.9 per cent in the current year and
further to 4.4 per cent next fiscal year.
IMF growth forecast is low-
er than the Reserve Bank of India
(RBI) projection. The central bank
predicted 7 per cent GDP growth for
FY 2022-23 and 6.4 per cent in the Union Finance Minister Nirmala Sitharaman participates in the Global Sovereign Debt Roundtable (GSDR) meeting with International Monetary
ongoing fiscal that started on April 1. Fund (IMF) Managing Director Kristalina Georgieva on the sidelines of the Spring Meetings 2023, in Washington DC on Wednesday. (ANI Photo)
The government is yet to release
full-year GDP numbers for 2022-23.
Meanwhile, the international FDI flows are increasingly con- sures are proving sticky, with labor cent, while Germany and the UK are
lender flagged concerns about infla- centrated among geopolitically markets tight in a number of econo- a dismal -0.1 per cent and -0.7 per
tion, debt and risks to the financial aligned countries, particularly in stra- mies. Side effects from the fast rise in cent, respectively.
sector from rising interest rates. It tegic sectors. policy rates are becoming apparent, Most countries will, however,
warned that if banks cut lending fur- Several emerging market and as banking sector vulnerabilities have avoid recession in 2023 despite the
ther, the global output will reduce by developing economies are highly vul- come into focus and fears of conta- COVID pandemic lingering and
another 0.3 percentage point in 2023. nerable to FDI relocation, given their gion have risen across the broader tightening financing conditions as the
“Despite the fillips from lower food reliance on FDI from geopolitically financial sector, including nonbank Russia-Ukraine war continues.
and energy prices and improved sup- distant countries. financial institutions. International Monetary Fund di-
ply-chain functioning, risks are firmly In the long term, FDI fragmen- Risks to the outlook are heavi- vision chief Daniel Leigh on Tuesday
to the downside with the increased tation arising from the emergence of ly skewed to the downside, with the reposed faith in the Indian economy
uncertainty from the recent finan- geopolitical blocs can generate large chances of a hard landing having ris- and said that it is a “very strong econ-
cial sector turmoil,” the report said. output losses, especially for emerging en sharply, added the report. omy.”
The IMF projects growth to bot- market and developing economies, Public debt as a ratio to GDP He said that India is one of the
tom out at 2.8 per cent in 2023, pick- added the report. soared across the world during bright spots in the global economy
ing up to 3 per cent in 2024. Inflation Tentative signs in early 2023 that COVID-19 and is expected to remain right now with a high growth rate.
is expected to stay elevated at 7 per the world economy could achieve a elevated, posing a growing challenge “Yes, we have a growth rate for India
cent for the rest of the year, before soft landing--with inflation coming for policymakers, particularly as real which is 6.8 in 2022. Let’s not forget
declining to 4.9 per cent next year. down and growth steady--have reced- interest rates are rising across the world. this is one of the bright spots in the
Supply-chain disruptions and ed amid stubbornly high inflation and China’s growth rate is projected global economy right now. Such a
rising geopolitical tensions have recent financial sector turmoil. to be 5.2 per cent in 2023 and 4.5 per high growth rate and it is moderating
brought the risks and potential ben- Although inflation has declined cent in 2024 against its growth rate of down to 5.9 with a -.2 revision com-
efits and costs of geoeconomic frag- as central banks have raised interest three per cent in 2022. pared to January, what’s happening
mentation to the center of the policy rates and food and energy prices have The US’s growth forecast for here is also a set of historical revi-
debate, added the report. come down, underlying price pres- 2023 is 1.6 per cent, France 0.7 per sions,” said Leigh.

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