IMF lowers India's growth projection to 5.9% for current fiscal

Washington: The International Monetary Fund (IMF) on Tuesday lowered India's economic growth projection for the current fiscal to 5.9 percent from 6.1 percent earlier. Yet, India will continue to be the fastest-growing economy in the world. In its annual World Economic Outlook, IMF also lowered the forecast for the 2024-25 fiscal (April 2024 to March 2025) to 6.3 per cent from the 6.8 percent it had predicted in January this year. The growth rate of 5.9 percent in 2023-24 fiscal compares to an estimated 6.8 percent in the previous year.

IMF growth forecast is lower than projections by the Reserve Bank of India (RBI). RBI sees a 7 percent GDP growth in 2022-23 and a 6.4 percent in the current fiscal that started on April 1. The government is yet to release full-year GDP numbers for 2022-23. Despite a significant drop in growth rate projections from 6.8 percent in 2022 to 5.9 percent, India continues to be the fastest-growing economy in the world, the World Economic Outlook figures revealed.

China's growth rate is projected to be 5.2 percent in 2023 and 4.5 percent in 2024 against its growth rate of three percent in 2022. On the surface, the global economy appears to be poised for a gradual recovery from the powerful blows of the pandemic and Russia's unprovoked war on Ukraine. China is rebounding strongly following the reopening of its economy. Supply-chain disruptions are unwinding, while the dislocations to energy and food markets caused by the war are receding, said IMF Chief Economist Pierre-Olivier Gourinchas.

"In our latest forecast, global growth will bottom out at 2.8 percent this year before rising modestly to 3 percent in 2024. Global inflation will decrease, although more slowly than initially anticipated, from 8.7 percent in 2022 to 7 percent this year and 4.9 percent in 2024," he said. According to him, this year's economic slowdown is concentrated in advanced economies, especially the euro area and the United Kingdom, where growth is expected to fall to 0.8 percent and -0.3 percent this year before rebounding to 1.4 and 1 percent, respectively.

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