The Indian economy is expected to slow down slightly in the upcoming fiscal year, according to the International Monetary Fund (IMF), which forecasted growth to drop to 6.1 per cent from 6.8 per cent during the current fiscal year ending March 31.
The January update to the IMF’s World Economic Outlook was released on Tuesday. According to this forecast, global growth is expected to decline from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023 before increasing to 3.1 per cent in 2024.
“Our growth predictions for India have remained the same since our October Outlook. We expect growth of 6.8% for the current fiscal year, which ends in March, and a slight slowdown to 6.1% in the fiscal year 2023. Outside factors largely influence that.
And external factors are primarily responsible for that. IMF Chief Economist and Director of Research Pierre-Olivier Gourinchas told reporters in this place.
According to the IMF’s World Economic Outlook update, “Growth in India is set to decline from 6.8 per cent in 2022 to 6.1 per cent in 2023 before picking up to 6.8 per cent in 2024, with resilient domestic demand despite external headwinds.”
After a more severe than anticipated slowdown in 2022 to 4.3 per cent due to China’s economy, growth in emerging and developing Asia is predicted to increase to 5.3 per cent and 5.2 percent, respectively, in 2023 and 2024.
For the first time since 2010, China’s real GDP growth slowed in the fourth quarter of 2022, which implies a 0.2 percentage point downgrade for 2022 growth to 3.0 percent.
For the first time in more than 40 years, China’s real GDP growth will slow in the fourth quarter of 2022, resulting in a 0.2 percentage point downgrade for 2022 growth to 3.0 percent.
According to projections, China’s growth will reach 5.2 percent in 2023 due to rapidly improving mobility, then decline to 4.5 percent in 2024 before stabilising at less than 4 percent over the medium term due to waning business dynamism and sluggish structural reform progress.
“I want to highlight the fact that emerging market economies and developing economies seem to be already growing. The projected growth for the region is 3.9 percent in 2022 and 4 percent in 2023.
“The fact that China and India will collectively account for about 50% of global growth in 2023 is another important point.
In our October forecast, we had a favourable opinion of India. That optimistic viewpoint has essentially not changed,” Gourinchas responded.
In a blog post, he claimed that India continues to be a shining example. He added that it would account for half of the global growth this year, along with China, compared to just a tenth for the US and the euro area combined.
The slowdown will be more pronounced for advanced economies, falling from 2.7 per cent last year to 1.2 per cent and 1.4 per cent this year and next.