The IMF’s forecast for the current fiscal is less than the government’s Central Statistics Office of 9.2 percent.
Highlight
- The IMF forecast for the current fiscal is down by 9.2 percent
- Gita Gopinath wrote that global reform faces many challenges
- In China, pandemic-induced disruptions related to zero-tolerance COVID-19 policy
The International Monetary Fund (IMF) has slashed India’s economic growth forecast to 9 per cent for the current fiscal year ending March 31, joining a host of agencies that have blamed the spread of the new version of the coronavirus. has downgraded its estimates over concerns over the impact of . Business activity and mobility.
In its latest update to the World Economic Outlook on Tuesday, the Washington-based international financial institution, which had forecast 9.5 per cent GDP growth for India in October last year, forecast for the next fiscal year 2013 (April 2022 to March 2023). . at 7.1 percent. The Indian economy had contracted by 7.3 per cent in the financial year 2020-21.
The IMF’s forecast for the current fiscal is lower than the 9.2 per cent projected by the government’s Central Statistics Office and 9.5 per cent by the Reserve Bank of India. Its forecast is lower than the S&P’s 9.5 per cent and Moody’s 9.3 per cent, but higher than the World Bank’s 8.3 per cent and Fitch’s 8.4 per cent.
According to the IMF, India’s prospects for 2023 have been marked by expected improvements in credit growth and, subsequently, investment and consumption, better-than-expected performance of the financial sector. The IMF said global growth is expected to decelerate from 5.9 per cent in 2021 to 4.4 per cent in 2022, half a percentage point lower for 2022 than the October WEO, largely bucking forecast markdowns in the two largest economies – the US and China. it shows.
It added that a revised assumption of the removal of the Build Back Better fiscal policy package from baseline, a return to earlier monetary housing, and continued shortages of supply produced a 1.2 percentage-point revision for the United States. In China, pandemic-induced disruptions related to the zero-tolerance COVID-19 policy and prolonged financial tensions among property developers have prompted a 0.8 percentage-point downgrade. Global growth is expected to slow to 3.8 percent in 2023.
“While this is 0.2 percent higher than the previous forecast, the upgrade largely reflects the mechanical pickup following the current drag on growth in the second half of 2022. The forecast is conditional on adverse health outcomes falling to low levels in most countries. by the end of 2022, assuming that worldwide vaccination rates improve and treatments become more effective,” the report said.
In a blog post, IMF Chief Economist Gita Gopinath wrote that sustained global recovery faces many challenges as the pandemic enters its third year. The rapid spread of the Omicron variant has led to renewed mobility restrictions and increased labor shortages in many countries, she said. ,
Gopinath wrote that supply disruptions still weigh on activity and are contributing to higher inflation, compounded by pressure from strong demand and higher food and energy prices.
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