The International Monetary Fund (IMF) has revised its growth projection for India in 2023, estimating a growth rate of 6.1%. This represents a 0.2 percentage point upward revision compared to the April projection. The IMF attributed this positive outlook to the momentum gained from stronger-than-expected growth in the fourth quarter of 2022, driven by robust domestic investment.
The latest update of the World Economic Outlook also revealed a 0.2% point upward revision from the April estimates, indicating the continuing resilience of India’s economy. According to the report, global growth is projected to fall from an estimated 3.5 per cent in 2022 to 3 per cent in both 2023 and 2024.
The most recent World Economic Outlook data forecast a 0.2% point increase from April projections, following momentum from stronger-than-expected growth in the fourth quarter of 2022 due to increased domestic investment. It is worth noting that the Reserve Bank of India has forecasted 6.5% growth for this fiscal year, while the World Bank has forecasted 6.3%.
India also retains the tag of the fastest-growing economy with neighbouring China estimated to grow at 5.2% in 2023 and 4.5% in 2024.
The IMF has also revised the global growth output projection, forecasting a decline from an estimated 3.5% in 2022 to 3% in both 2023 and 2024 on an annual average basis. Advanced economies primarily drive this decline, with weaker manufacturing and idiosyncratic factors offsetting stronger service activity.
Global growth bottomed out in the fourth quarter of 2022 on a year-over-year basis, according to the report. However, for some major economies, this bottoming out is not expected to occur until the second half of 2023. The rise in central bank policy rates to combat inflation continues to weigh on economic activity.
Regarding inflation, global headline inflation is predicted to decrease to 6.8% in 2023 and further to 5.2% in 2024, compared to 8.7% in 2022.
In conclusion, the IMF’s revised growth projection reflects the positive momentum in India’s economy and reaffirms its status as the fastest-growing major economy in the world.
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