The International Monetary Fund (IMF) in its World Economic Outlook- January 2023 update has projected India’s growth to decline from 6.8% in 2022 to 6.1% in 2023 before picking up to 6.8% in 2024.
- The expected slowdown in FY24 is due to external factors.
Global Growth Forecast:
i.The global growth is projected to fall from an estimated 3.4% in 2022 to 2.9% in 2023, then rise to 3.1% in 2024.
- The global growth projected for 2023 and 2024 is below the historical (2000–19) annual average of 3.8%
- The forecast of low growth in 2023 reflects the rise in central bank rates to fight inflation, especially in advanced economies, as well as the war in Ukraine.
ii.About 84% of countries are expected to have lower headline (consumer price index) inflation in 2023 than in 2022.
iii.Global inflation will decline from 8.8% in 2022 (annual average) to 6.6% in 2023 and 4.3% in 2024, above pre-pandemic (2017–19) levels of about 3.5%.
iv.World trade growth is expected to decline in 2023 to 2.4%, despite an easing of supply bottlenecks, before rising to 3.4% in 2024.
v.In 2023, oil prices are projected to fall by about 16%, while nonfuel commodity prices are expected to fall by, on average, 6.3%.
vi.Growth in emerging and developing Asia is expected to rise in 2023 and 2024 to 5.3% and 5.2%, respectively.
Recent Related News:
i.In december 2022, IMF in its Article IV consultation report projected a growth rate of 6.8% for India in the current fiscal year (FY23) and falling to 6.1% in the next fiscal
ii.The IMF issues a warning about 2023 being the “darkest hour” for global
growth, and the report mentions the numerous short-term measures used by countries to increase Gross Domestic Product (GDP).
About International Monetary Fund (IMF):
Managing Director– Kristalina Georgieva
Headquarters– Washington, DC, United States (US)