The IMF’s updated outlook on the world economy, which is now projected to grow 20 basis points higher than projected in 2023, is in line with an upward revision in India’s growth forecast.
The underwhelming growth numbers for January-March have caused the International Monetary Fund (IMF) to raise its GDP growth forecast for India for 2023-24 from 5.9 per cent to 6.1 per cent. Growth in India is projected to reach 6.1 percent in 2023, an increase of 0.2 percentage points, as a result of stronger than expected growth in the fourth quarter of 2022 (FY 2022-23) due to increased domestic investment. The April projection, the multilateral organization said in an update to its World Economic Outlook (WEO) report on July 25.
According to the data released on May 31, India’s GDP growth in the first quarter of 2023 has increased to 6.1 percent, which is much higher than all forecasts. This resulted in the Ministry of Statistics raising its forecast for growth in 2022-2023 by 20 percent.
Despite the course change, the Reserve Bank of India (RBI) and the government, both forecasting 6.5 per cent GDP growth in 2023-24, are more optimistic about India than the IMF. As a result, the IMF’s predictions are in line with some economists working in the private sector, who predict that India’s growth will fall sharply to below 6 percent this year as global growth prospects shrink as a result of rapid tightening of monetary policy by central banks around the world to combat high inflation.
New World Bank President Ajay Banga emphasized India’s economic story during the G20 finance ministers and central bank governors’ conference in Gandhinagar earlier this month, when he said he was “more optimistic about India today than in a long time”.
The IMF has not revised its forecast for 2019 and still expects India’s GDP to grow by 6.3 per cent between 2024 and 2025.
The IMF’s upward revision of India’s growth forecast is in line with its revised outlook for the world economy, which is now expected to grow at 3% in 2023 instead of 2.8% projected in April.