The International Monetary Fund (IMF) on Tuesday lowered its forecast for India’s economic growth in 2022 to 6.8 per cent, as it joined other global agencies that have downgraded forecasts. The IMF had in July projected a 7.4 percent growth in gross domestic product (GDP) for India in the fiscal year that began in April 2022. Even this forecast was lower than the 8.2 per cent projected in January this year.
India grew at a rate of 8.7 per cent in the 2021-22 financial year (April 2021 to March 2022). In its annual World Economic Outlook report released on Tuesday, the IMF said the outlook for India is 6.8 per cent growth in 2022 – a drop of 0.6 percentage points since its July forecast, reflecting weaker-than-expected results in the second quarter and Reduced external demand.
Global growth is projected to range from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023. This is the weakest growth profile since 2001, excluding the global financial crisis and the acute phase of the COVID-19 pandemic. Economic growth projections show significant slowdowns for the largest economies: US GDP contraction in the first half of 2022, a contraction in the euro area in the second half of 2022, and a prolonged COVID-19 outbreak in China and a growing asset sector. Lockdown with crisis said IMF.
Pierre said, “The global economy continues to face challenges, shaped by the influence of three powerful forces: a cost-of-life crisis caused by the Russian invasion of Ukraine, persistent and widespread inflationary pressures and a recession in China, said Pierre. -Olivier Gourainchas, economic adviser and research director of the IMF, in his forward-looking statement to the WEO issued during the annual meeting of the IMF and the World Bank.
More than a third of the global economy will contract in 2023, while the three largest economies – the United States, the European Union and China – will continue to stall. “In short, the worst is yet to come, and for many, 2023 will feel like a recession,” he wrote. The growth forecast for China is 3.2 percent, which is lower than the 8.1 percent growth rate in 2021. In China, continuous lockdowns under its zero-Covid policy have taken a toll on the economy, especially in the second quarter of 2022. In addition, this sector, which represents about one fifth of economic activity in China, is becoming increasingly vulnerable.
“Given the size of China’s economy and its importance to global supply chains, this will weigh heavily on global trade and activity,” Gaurynchas said. In the United States, tightening monetary and financial conditions will slow growth to 1 percent next year. In China, the IMF has cut its growth forecast for next year to 4.4 percent due to a weak asset sector and continued lockdowns, they wrote in a blog post. “Russia’s invasion of Ukraine continues to powerfully destabilize the global economy. Beyond the growing and senseless destruction of lives and livelihoods, it has led to a severe energy crisis in Europe that is rapidly increasing the cost of living.” and disrupting economic activities,” he said.
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