IMF Upgrades India’s GDP Growth Projection to 6.1% for 2023-24, Citing Strong Domestic Investment

Date:

In a significant update, the International Monetary Fund (IMF) has increased its growth forecast for India’s gross domestic product (GDP) in the fiscal year 2023-24 to 6.1%. This upward revision of 0.2 percentage points compared to the April projection is primarily influenced by the robust quarterly expansion spurred by strong domestic investment.

In April, the IMF had lowered India’s GDP growth forecast for 2023-24 to 5.9% due to heightened global uncertainty. However, the latest update to the World Economic Outlook (WEO) retained the GDP growth forecast for the subsequent fiscal year, 2024-25, at 6.3%. With this projection, India retains the tag of being the fastest-growing major economy for both this fiscal year and the next.

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The IMF’s estimation of 6.1% growth is slightly lower than the Reserve Bank of India’s (RBI) forecast of 6.5%. The World Bank projects growth at 6.3%, while the Asian Development Bank anticipates 6.4% growth for India.

India’s economy has exhibited a strong recovery following the impact of the pandemic and the disruptions caused by the Russia-Ukraine war on supply chains. Various economic indicators have pointed to sustained growth momentum.

The IMF’s projection comes amid a global scenario, with China’s growth forecast unchanged at 5.2% for 2023.

The Indian economy’s positive trajectory has contributed to one-sixth of total global growth this year, according to Danish Leigh, division chief of the Research Department at IMF. He emphasized that India remains an economy growing significantly and projected inflation to remain within the target range of 2-6% for FY24.

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Inflation in India is forecasted at 4.9% for FY24, with factors such as easing food prices and the Reserve Bank of India’s proactive measures playing a role. Leigh emphasized the need to balance inflation and output pressures to ensure inflation remains within the target range.

The International Monetary Fund was established after World War II, along with the World Bank, to assist in the reconstruction of war-affected nations. Governed by and accountable to its nearly-global membership of 190 countries, the IMF’s primary purpose is to ensure the stability of the international monetary system and facilitate transactions between countries. India joined the IMF on December 27, 1945, and has since played a crucial role in shaping the global economic landscape.

Source:

https://www.businesstoday.in/latest/economy/story/imf-raises-india-growth-forecast-to-61-for-fy24-after-strong-q4-showing-391235-2023-07-25

https://timesofindia.indiatimes.com/business/india-business/imf-raises-indias-fy24-growth-forecast-to-6-1/articleshow/102120312.cms

https://economictimes.indiatimes.com/news/economy/indicators/imf-raises-indias-fy24-forecast-to-6-1-fy25-forecast-unchanged-at-6-3/articleshow/102111958.cms

https://indianexpress.com/article/business/economy/imf-projects-indian-economy-to-grow-at-6-1-per-cent-in-2023-8860049/

https://www.moneycontrol.com/news/business/economy/imf-raises-indias-fy24-gdp-growth-forecast-by-20-bps-to-6-1-11026291.html

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