The International Monetary Fund (IMF) has revised its forecast for India’s economic growth rate in 2023 to 6.1 per cent, which is 0.2 percentage points higher than its previous projection in April.
This upward revision is a result of the strong growth seen in India’s economy during the fourth quarter of 2022, driven by increased domestic investment.
In contrast, the IMF has maintained its forecast for China’s growth rate at 5.2 per cent for 2023 and 4.5 per cent for 2024. The report attributes China’s underperformance in investment to the ongoing real estate downturn.
The IMF’s latest update of the World Economic Outlook indicates that growth in emerging and developing Asia is expected to reach 5.3 per cent in 2023 and 5.0 per cent in 2024, with a slight downward revision for 2024.
Japan’s growth is projected to rise from 1.1 per cent in 2022 to 1.4 per cent in 2023, but it is expected to slow to 1.0 per cent in 2024 as the effects of past stimuli diminish.
On a global scale, the IMF predicts a decline in growth from an estimated 3.5 per cent in 2022 to 3.0 per cent in both 2023 and 2024. Global headline inflation is also expected to decrease from 8.7 per cent in 2022 to 6.8 per cent in 2023 and 5.2 per cent in 2024.
Despite the upward revision for 2023, the IMF highlights that the growth forecast remains weak compared to historical standards, partly due to central banks raising policy rates to combat inflation, which is impacting economic activity.
The IMF warns that global headline inflation could remain high or even increase if further shocks occur, such as escalated conflict in Ukraine or extreme weather events. This may lead to more restrictive monetary policies and potential financial sector turbulence.
As for the United States, the IMF projects a slowdown in growth from 2.1 per cent in 2022 to 1.8 per cent in 2023, according to the World Economic Outlook Update.
