IMF raises India's growth forecast second time citing strong consumption

New Delhi: The International Monetary Fund (IMF) has raised India's GDP growth forecast for India for the financial year 2023-24 to 6.3 per cent, its second upward revision since the April report.

According to the latest World Economic Outlook report by the multilateral agency, which was released on Tuesday, the growth is expected to grow by 6.3 per cent this fiscal year, 20 basis points (100 basis points is equal to 1 percentage point) higher than what it had estimated in its previous report.

IMF attributed stronger-than-expected consumption during April-June for the upward projection in the growth estimate.

The growth forecast was raised from 5.9 per cent in April, 6.1 per cent in July, to 6.3 per cent now, taking it closer to the 6.5 per cent predicted by the Indian authorities.

For 2024-25, IMF pegged India's GDP growth at 6.3 per cent, though unchanged from its earlier two projections.

IMF projected India's consumer inflation at 5.5 per cent this fiscal, against RBI's 5.4 per cent forecast. RBI expects Q2 (Jul-Sep) inflation at 6.4 per cent, Q3 (Oct-Dec) at 5.6 per cent and Q4 (Jan-Mar) at 5.2 per cent.

For Q1 (2024-25 fiscal), it is projected at 5.2 per cent. Overall, the IMF forecast global growth to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2.9 per cent in 2024, well below the historical (2000-19) average of 3.8 per cent.

Advanced economies are expected to slow from 2.6 per cent in 2022 to 1.5 per cent in 2023 and 1.4 per cent in 2024 as monetary policy tightening starts to bite.

Emerging markets and developing economies are projected to have a modest decline in growth from 4.1 per cent in 2022 to 4.0 per cent in both 2023 and 2024. Global inflation is forecast to decline steadily, from 8.7 per cent in 2022 to 6.9 per cent in 2023 and 5.8 per cent in 2024, due to tighter monetary policy aided by lower international commodity prices.

(ANI)