Hyderabad/Washington: The IMF (International Monetary Fund) projects India's growth to be 6.1% for 2023. The projection comes ahead of the presentation of the Union Budget 2023 in the Parliament. In its latest observations, the IMF has projected a slightly brighter picture for the world economy despite inflation, higher interest rates in the wake of Russia's invasion.
The IMF, a global lending organisation, expects inflation to go down to 6.6 percent 2023 from 8.8 percent last year. It says China economy may grow at 5.2 percent during 2023 as against just 3 percent in 2022. The IMF has projected an improved outlook for America and several European countries.
Pierre-Olivier Gourinchas, Chief Economist and Director, IMF, said that their growth projections for India remain unchanged from their October Outlook. The IMF projected 6.8 percent growth for 2022-`23 which may slow down to 6.1 percent in 2023-`24. However, the India's growth will pick up to reach 6.8 during 2024, which is going to be an election year. This is likely to be caused by resilient domestic demand despite external headwinds, as per the IMF's World Economic Outlook update.
The IMF projected growth in several countries in emerging Asia to rise in 2023 and 2024 to 5.3 percent and 5.2 percent, after the slowdown in 2022. China's real GDP slowdown in the fourth quarter of 2022 implies a 0.2 percentage point downgrade. For the first time in more than 40 years, China's growth went below the global average.
Gourinchas said that overall, emerging market economies on the whole and developing economies seem to be already on their way up. Growth in China is projected to rise to 5.2 percent in 2023 and then fall to 4.5 percent in 2024 before settling at below 4 percent. Together, China and India account for about 50 percent of world growth in 2023 when compared to a 10th for America and Euro put together. Indian remains a bright spot, he added.
According to Gourinchas, in advanced economies, the slowdown will be more pronounced, with a decline from 2.7 percent last year to 1.2 percent and 1.4 percent this year. The US' growth will slow to 1.4 percent in 2023 and euro area conditions are more challenging despite signs of resilience.
