IMF World Economic Outlook- Update

On July 27th the International Monetary Fund has cut India’s GDP growth forecast to 9.5% for the fiscal year 2021-22. Previously, IMF has forecasted 12.5% GDP growth.

Highlights relating to India

  • GDP forecast has been cut citing the hit on economic activity due to the second wave of the COVID-19 pandemic.
  • Due to the second wave during the months of March to May the growth prospect of India has been downgraded and it is expected that recovery will be slow.
  • The report states that steady recovery is not assured in any country around the globe as long as the population remain susceptible to the COVID-19 virus and its various mutations.
  • For the fiscal year 2022-23, IMF expects an economic growth of 8.5%, which is more than the 6.9 % projected by them in the month of in April.
  • S&P Global Ratings projected a 9.5% growth in GDP in the fiscal year 2021-22 and 7.8% in the fiscal year 2022-23.
  • RBI also forecasted 9.5% growth and it cut down from the previously projected 10.5%.
  • The World Bank has projected India’s GDP growth at 8.3% for FY22.
  • Asian Development Bank (ADB) has cut India’s economic growth forecast from 11% to 10%

Global Economy

In the latest World Economic Outlook report published by IMF, the global economy growth has been projected at 6% in the year 2021 and 4.9% for the year 2022. Gita Gopinath, IMF’s Chief Economist, has said that economic recovery globally is going on, but the gap is widening gap among the developing, emerging and advanced economies. IMF has estimated that this COVID-19 pandemic has reduced the per capita incomes in all the advanced economies of the world by 2.8%, with 6.3% of per capita loss annually for the developing and the emerging markets.

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