IMF lifts 2023 growth forecast in World Economic Outlook report; India remains 'a bright spot'

The International Monetary Fund (IMF) released its latest World Economic Outlook report on Monday. In the report, India`s economy has retained the crown of "a bright spot" and is slated to account for half of the global growth, together with China, in 2023. Compared to it, just a tenth of it will be coming from the combined might of the US, the world`s largest economy, and Europe, which comprises some of the largest economies.

"India remains a bright spot," IMF chief economist Pierre-Olivier Gourinchaswrote in a blog accompanying the World Economic Outlook update, a quarterly report.

"Together with China, it will account for half of global growth this year, versus just a tenth for the US and euro area combined."

Add WION as a Preferred Source

Inflation in India is expected to come down from 6.8 per cent in the current fiscal year ending March 31 to five percent the next fiscal, and then drop further to four per cent in 2024.

The Indian economy is expected to grow by 6.1 per cent in 2023, which is 0.7 percentage points lower than 6.8 per cent in 2022, which was earlier projected by the fund in its October forecast.

Also Read |IMF praises direct cash transfer and other government schemes

Meanwhile, global growth is set to be higher than expected this year, as the IMF raised its forecast on surprisingly strong consumption and investment. With China lifting zero-Covid restrictions, the economy is expected to get another boost.

The global economy is still projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 per cent in 2024.

But "adverse risks have moderated" since last October's forecast, the IMF said in the report.

"The year ahead will still be challenging... but it could well represent a turning point with growth bottoming out and inflation declining," Gourinchastold reporters.

The report further sees Germany and Italy avoiding recessions this year, shifting from earlier predictions. Notably, European growth proved "more resilient than expected" despite the ongoing war in Ukraine.

Britain was the only major advanced economy the IMF predicted to be in recession this year, with a 0.6 per cent fall in GDP. People are struggling with rising living costs, including for energy and mortgages in the country.

The IMF also revised China's growth outlook sharply higher for 2023, to 5.2 per cent from 4.4 per cent in the October forecast after the country dropped its "zero-COVID" lockdown policies in 2022. The zero Covid policy slashed gravely affected China's growth rate, bringing it to 3.0 per cent - a pace below the global average for the first time in more than 40 years.

The body added that China's growth will "fall to 4.5 per cent in 2024 before settling at below four per cent over the medium term amid declining business dynamism and slow progress on structural reforms."

(With inputs from agencies)

WATCH WION LIVE HERE

You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.