NEW DELHI / LONDON : The International Monetary Fund has raised India’s growth forecast on higher consumption even as the global economy is estimated to slow down.
The IMF projects India’s GDP to grow 6.3% in FY24, 20 basis points higher than previously estimated, according to the World Economic Outlook published on Tuesday.
Growth in India is projected to remain strong at 6.3% in both FY24 and FY25, with an upward revision of 0.2 percentage point for FY23, reflecting stronger-than-expected consumption during April-June, it said.
However, the baseline forecast is for global growth to slow from 3.5% in 2022 to 3% in 2023 and 2.9% in 2024, well below the historical (2000–19) average of 3.8%., the report said.
Advanced economies are expected to slow from 2.6% in 2022 to 1.5% in 2023 and 1.4% in 2024 as policy tightening starts to bite. Emerging market and developing economies are projected to have a modest decline from 4.1% in 2022 to 4% in 2023 and 2024.
Global inflation is forecast to decline steadily from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024 due to tighter monetary policy aided by lower international commodity prices, according to IMF. Core inflation is generally projected to decline more gradually, and inflation is not expected to return to target until 2025 in most cases.
Monetary policy actions and frameworks are key at the current juncture to keep inflation expectations anchored, the report said.