IMF Slashes India’s GDP Growth Forecast To 8.2% for FY23

India's Gross Domestic Product (GDP) was  projected at 8.2% for the financial year 2022-23 by the International Monetary Fund (IMF). The GDP projection declined from its previous estimation i.e. 9% for the FY23. For the financial year 2023-24, the multilateral agency cut India's GDP projection by 20 basis points to 6.9% from the earlier estimation of 7.2%.

Last week, the World Bank had cuts India's GDP forecast to 8% from 8.7% for FY23 due to the Russia-Ukraine war. The ‘World Economic Outlook report’ was released by IMF. It was expected that the domestic demand will be weaker owing to higher oil prices will weigh on consumption. The IMF estimated India’s inflation to average 6.1% in FY23, breaching RBI’s upper tolerance band of 6%, and ease to 4.8% in the following fiscal.

The GDP projection for other countries are China (4.4%), USA (3.7%), Germany (2.1%), Japan (2.4%), Russia (-8%). When compared with other countries, India remained as the world’s fastest-growing major economy. In terms of the global growth scenario, IMF sharply downgrades its 2022 forecast to 3.6% due to the "seismic" impact of the war between Russia and Ukraine.

   Important points for the exam:

• The International Monetary Fund (IMF) estimated India’s GDP at 8.2% and 6.9% for the financial year 2022-23 and 2023-24 respectively.
• The estimation was declined from its earlier projection of 9% due to higher oil prices ($114 per barrel).
• When compared with other major economies, the Indian economy remained as the world’s fastest-growing economy.

   Facts to know:

• The International Monetary Fund (IMF) was established in 1945.
• Headquarters of IMF: Washington, D.C., U.S.
• Managing Director of IMF: Ms.Kristalina Georgieva.
• First Deputy Managing Director of IMF: Ms.Gita Gopinath.