IMF World Economic Outlook- Update

India’s economic growth forecast has been reduced from 8.2% to 7.4%. The International Monetary Fund (IMF) released India’s growth prediction in its World Economic Outlook on July 26, 2022.

Key Findings of the IMF’s Outlook:

  • India’s economic growth forecast was estimated to be 8.2% in April.
  • IMF reduced the estimate to 7.4% due to vulnerability of Indian economy considering the external shocks and rapid monetary policy tightening.
  • IMF recommends the policymakers to prioritize suggested policymakers prioritize heal the inflation through monetary policy tightening.
  • India’s growth forecast for fiscal year 2023-24 has also been reduced by 0.8 percent point, to 6.1% due to increasing economic risks.

India’s growth forecast by other institutions:

  • The Reserve Bank of India (RBI) has estimated India’s growth to 7.2% in 2022-23.
  • Asian Development Bank has decreased India’s growth forecast to 7.2% for 2022-23.

Global Growth Outlook:

Global Growth Outlook has also been reduced by the IMF. It has warned that, world is moving towards recession. Global economic expansion is expected to slow down to 3.2% in 2022. This expansion is slower as compared to 3.6% in April 2022.

India to remain Fastest Growing economy:

According to IMF, India will continue to be fastest growing major economies worldwide in 2022-23 and 2023-24. Only Saudi Arabia is likely to be ahead of India. Saudi Arabia is estimated to grow at 7.6% in 2022. Growth in China is likely to slow down to 3.3% in 2022. Russia, South Africa, and Brazil witnessed an upward revision economic forecast.

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