India’s growth rate will remain strong in IMF’s World Economic Outlook. It is estimated to be 6.3% in 2023 and 2024. This is due to better-than-expected consumption figures in the April to June-quarter.
Highlights of the World Economic Outlook
Global growth forecast
- The IMF estimates global GDP growth of 3% in 2023, which is the same as its forecast global GDP for July 2023.
- However, global GDP growth for 2024 has declined by 10 basis points from the July forecast to 2.9%.
Chinese economy forecast
- The Chinese economy is expected to grow by 5% in 2023, up from its 3% growth in 2022.
- The IMF’s October forecast for China’s growth in 2023 and 2024 is 20 and 30 basis points lower than its July forecast, indicating that the world’s second-largest economy will face difficulty maintaining its position. May fall.
Inflation and monetary policy
- The IMF estimates that global inflation will grow at a rate of 5.8% in 2024, which is faster than the projected three-month rate of 5.2%, and these projections do not take into account the events of the weekend and their consequences.
Concerns and Risks
- Growth has lagged due to tight monetary policies implemented by central banks to tackle inflation, which is set to reach 8.7% by 2022, and an uneven recovery as a result of Russia’s invasion of Ukraine, the pandemic, and supply chain disruptions.
Uncertainties and downside risks
- Investment remains below pre-pandemic levels, hit by higher interest rates and tighter credit conditions.
- The IMF advises countries to rebuild fiscal buffers to protect against future risks.
- The probability of global growth falling below 2% is about 15%, with a higher risk of falling than reaching highs for the year 2024.
Conclusion related to India
- India’s GDP for session 2023-24 will be 6.3%, which is an increase of 20 basis points from July 2023.
- The IMF’s growth forecast for India for session 2023-24 is now almost the same as what the World Bank (WB) had estimated in its India Development Update.
- India’s GDP growth forecast for session 2024-25 remains unchanged at 6.3%.
- Despite a strong growth of 7.8% in the quarter ending June 2023, the IMF has projected India’s GDP growth for session 2023-24 to rise, with the annual growth figure still below the RBI Monetary Policy Committee’s target of 6.5%. The % rate is lower than expected.
International Monetary Fund
- The IMF is an international organization that promotes global economic growth and financial stability, encourages international trade, and helps reduce poverty.
- It was established in the year 1945 with the Bretton Woods Conference.
- The primary purpose of the IMF is to ensure the stability of the international monetary system, the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other.
- Ultimately it became the lender of last resort to governments of countries that faced severe currency crises.