The IMF has reduced its growth prediction for India’s GDP for the current fiscal year (April 2023 – March 2024) by 0.2 percentage points to 5.9%. The International Monetary Fund has lowered its forecast for India’s economic growth to 6.3% for the next fiscal year from 6.7%.
The International Monetary Fund said that the lower revision was due to better-than-expected past performance.
Tuesday morning during a press briefing, in response to a question from The Hindu, IMF economist Daniel Leigh said, “We learned that 2020-2021 has been substantially better than predicted.” These expansion rates were first unveiled at the Washington, DC, start of the World Bank and IMF Spring Meetings in the World Economic Outlook (WEO): A Tough Recovery report.
The opportunity to “catch up” has shrunk as a result, Mr. Leigh said. The International Monetary Fund predicted 6.8% growth for India in the fiscal year that concluded on March 31.
They’ve had more time to catch up in the past, so “pent-up demand from consumption,” which inspired our earlier projection, will be less, Mr. Leigh said.
According to Mr. Leigh, “once again a very robust economy is required” to help India continue to improve its standard of life and generate jobs. The Hindu was curious about job and career opportunities.
According to the IMF, global production growth will slow to 2.8% in 2023 (calendar year) before picking up speed again to 3% in 2024.
Slow yet steady progress
According to IMF Chief Economist Pierre-Olivier Gourinchas, “the gradual recovery of the global economy from both the pandemic and Russia’s invasion of Ukraine remains on track,” as the Chinese economy is bouncing back strongly after being reopened, supply chain disruptions are easing, and the negative effects of the war on food and energy prices are fading.
Also, “serious unfavorable financial stability concerns have surfaced,” he said.
According to the IMF assessment, the global economy is less likely to experience a “smooth landing” after a period of high inflation and unstable growth because of “obstinately high inflation” and recent volatility in the financial sector.
It is anticipated that the growth rate of developed economies would be especially slow. It was predicted that the U.S. economy will expand by 1.6% this calendar year and 1.1% next year, while the Euro Area would expand by 0.8% and 1.4%, respectively. Growth in China is anticipated to reach 5.2% this year and 4.5% in 2019.
While declining food and energy costs and central bank rate rises have helped reduce inflation, the IMF notes that underlying pricing pressures persist and that labor markets in a number of nations remain constricted.
If current worries in the financial sector can be contained, the IMF projects global growth of 3.0% in five years.
The World Economic Outlook (WEO) noted that “the weak forecast reflects the stringent policy measures necessary to bring down inflation, the consequences of the recent worsening in financial circumstances, the ongoing crisis in Ukraine, and the developing geoeconomic fragmentation.”
The IMF has urged central banks to keep up their anti-inflationary efforts and to use all of their policy tools to combat inflation. Governments should “strive for an overall restrictive posture,” the IMF said, while also helping people who are suffering the most from the cost of living problem in specific ways.