IMF Revises India’s 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges

IMF Revises India's 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges
IMF Revises India's 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges
IMF Revises India's 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges
IMF Revises India's 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges

IMF Revises India’s 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges

IMF Revises India’s 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges

IMF Revises India’s 2023 Growth Forecast Upwards to 6.3% Amid Global Economic Challenges

The International Monetary Fund (IMF) has raised its growth forecast for India in 2023 to 6.3%, aligning it with its unchanged outlook for 2024. This revision is attributed to “stronger-than-expected consumption” during the April-June quarter. In April, the IMF had already lauded India as “one of the bright spots in the global economy.” India’s expected growth is also projected to be the highest among developing economies, even as global economic growth faces headwinds such as Russia’s protracted war in Ukraine and the Israel-Hamas conflict.

Previously, the IMF had adjusted India’s growth projections downward, from 6.1% to 5.9% for the current fiscal year and from 6.8% to 6.3% for the 2024/25 fiscal year (FY25).

In contrast, the Reserve Bank of India has retained its growth forecast for this fiscal year at 6.5%.

The IMF’s projections for China have been downgraded, with the 2023 figures revised from 5.2% to 5%, and 2024 figures from 4.5% to 4.2%. These revisions are due to concerns about China’s real estate sector, prompting calls for “forceful action” by the Chinese government to restore confidence in the sector.

Among advanced economies, the United States has demonstrated strong growth trends, with an upward revision of 0.3 percentage points to reach 2.1% growth this year and an impressive 0.5-point increase to 1.5% growth next year. In contrast, the Euro area is expected to grow by only 0.7% this year and 1.2% next year, influenced by factors such as the Ukraine conflict’s impact on energy prices, resilient consumer spending, and improved pandemic-related support to businesses.

Germany’s outlook has worsened since July, making it the sole G7 country predicted to enter a recession, either this year or next, among European economies.

Japan’s outlook was raised to 2% for this year by the IMF.

In summary, while the IMF acknowledges the global economy’s “remarkable” resilience in recovering from the COVID-19 pandemic and other global risks, including rising living costs in several countries, it also notes that growth remains “slow and uneven,” with increasing global disparities. The IMF’s current estimate for global growth in 2023 is 3%, with a reduced projection of 2.9% for 2024, down 0.1% from the previous forecast in July.

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