The International Monetary Fund (IMF) is expecting India’s economic growth to slow down to 6.1% in the next fiscal year, from its expected 6.8% during the current financial year ending March 31 – a projection that has not changed from the IMF’s October Outlook.
What Happened?: The IMF expects India to be the fastest growing major economy despite growth dropping off to 6.1% in FY24, in its latest ‘World Economic Outlook’ update. The financial agency adds that it expects "resilient domestic demand” despite “a challenging external environment.”
"Growth in India is set to decline from 6.8% in 2022-23 to 6.1% in 2023-24, before picking up to 6.8% in 2024,” according to the IMF World Economic Outlook update, titled ‘Inflation Peaking amid Low growth’.
Per IMF’s updated projections, growth in emerging and developing Asia is expected to rise in 2023 and 2024 to 5.3% and 5.2% respectively, after the deeper-than-expected slowdown in 2022 to 4.3%.
“India remains a bright spot. Together with China, it will account for half of the global growth this year, versus just a tenth for the US and euro area combined,” highlights the IMF’s Economic Counsellor and the Director of Research, Pierre-Olivier Gourinchas.
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Meanwhile, the United Nations agency projected global growth to decline from an estimated 3.4% in 2022 to 2.9% in 2023 and then rise to 3.1% in 2024. The forecast for 2023 is 0.2 percentage points higher than what was predicted by the IMF in its October 2022 World Economic Outlook but below the historical average of 3.8%.
The IMF report comes a day ahead of the Union budget FY24 on Wednesday, which is expected to help protect India's economy from global macroeconomic headwinds and geopolitical uncertainty.
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