India’s economy is projected to grow by 5.9% this year and 6.3% in 2024
Washington:
The International Monetary Fund on Tuesday slightly lowered its outlook for the global economy, while forecasting that most countries would avoid recession this year despite economic and geopolitical concerns.
The IMF predicted that the global economy would grow by 2.8 percent this year and three percent in 2024, a decline of 0.1 percent from its previous forecast in January.
The US economy is expected to grow 1.6 percent in 2023, up 0.2 percent from the IMF’s previous forecast. US growth next year is predicted to slow to 1.1 percent, up 0.1 percentage point from January.
“The global economy is recovering from the shocks of the last few years, and in particular the pandemic, but also from the Russian invasion of Ukraine,” Pierre-Olivier Gaurinchas, IMF chief economist, told a press briefing ahead of the IMF release. World Economic Outlook (WEO) report.
The leadership of the World Bank and IMF hope to use this year’s spring meetings to promote an ambitious reform and fundraising agenda.
But their efforts will likely be undermined by high inflation, rising geopolitical tensions and concerns among member states over financial stability.
– Advanced economies drag down growth –
The overall picture painted by the WEO is a gloomy one, with global growth projected to slow in both the short and medium term.
IMF Managing Director Kristalina Georgieva said last year that nearly 90 percent of advanced economies would experience slower growth this year, while emerging markets in Asia are expected to see substantial increases in economic output – with India and China accounting for half of all growth. The portion is estimated. Week.
Meanwhile, low-income countries face a double whammy from higher borrowing costs due to higher interest rates and a drop in demand for their exports, Georgieva said. This can increase poverty and hunger.
According to WEO’s forecast, the IMF expects global inflation to decline to 7 per cent this year from 8.7 per cent last year.
The figure is well above the two percent target set by the US Federal Reserve and other central banks around the world, suggesting that monetary policymakers have a long way to go before getting inflation back under control.
Gourinchas told reporters that the IMF’s baseline forecasts believe that the financial instability triggered by the collapse of Silicon Valley Bank last month has been largely contained by “coercive actions” from regulators on both sides of the Atlantic.
But he added that central banks and policy makers have an important role to play in furthering financial stability.
– Germany on the brink of recession –
While the picture is one of slowing growth, almost all advanced economies are still expected to avoid recession this year and next.
Along with growth in the US, the euro area is also projected to grow by 0.8 percent this year and 1.4 percent next year, led by Spain, which will see growth of 1.5 percent in 2023 and 2 percent in 2024.
But Germany is now expected to contract by 0.1 percent this year, joining Britain as the only G7 economy expected to enter recession this year.
Among emerging market economies the picture is more positive, with China forecast to grow 5.2 percent this year. But its economic growth is predicted to slow to 4.5 percent in 2024, as the COVID-19 pandemic dampens its reopening.
India’s economic forecast has been downgraded from the previous forecast in January, but is still predicted to grow by 5.9 percent this year and 6.3 percent in 2024, providing some much-needed stimulus to the global economy.
And it is expected to grow by 0.7 percent this year, up 0.3 percentage points from its January forecast, despite Russia’s invasion of Ukraine.
– Poor productivity impacts medium-term outlook –
Looking ahead, the IMF forecast that global growth would decline to three percent in 2028, its lowest medium-term forecast since the 1990s.
Slowing population growth and the end of an era of economic stranglehold by many countries, including China and South Korea, are a big part of the expected recession, according to world chief Daniel Leigh, as are concerns about low productivity in many countries. Economic Studies Division in the Research Department of the IMF.
“Very low-hanging fruit was picked,” he told reporters ahead of the publication of the World Economic Outlook.
He said, “The biggest thing is that now due to geopolitical tension and fragmentation, development is also going to be affected.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)