IMF raises Indian Growth rate for FY 23 to 9%

Tags: Economics/Business

International Monetary Fund (IMF) has raised the growth prospect of the Indian economy in 2022-23 to 9 % from the earlier forecast of 8.5%.

The IMF “World Economic Outlook report” released on 25 January 2022 has cut the economic growth rate for the world with weak growth forecasted in the United States and China.

Main Points of the Report 

• It expects the world economy to grow by 4.4% in 2022 and 3.8% in 2023.  The world economy grew by 5.9% in 2021.
• The main reason for the drop in world growth is due to lower growth in the US and China.
• The main reason for the weak world economic outlook is the spread of the  Omicron variant of coronavirus which has led to a curb on  mobility  by countries . This has led  to the  disruption in the world supply chain and  rise in inflation  in all the countries.
• It expects the world's second largest economy China to grow by 4.8% and the largest economy in the world , the US  is expected to grow by 4% in 2022.

India a lone Bright spot

• Among major economies of the world India’s growth rate is expected to be one of the highest in the world.
• The Indian economy  growth rate has been increased from the earlier 8.5% to 9% in 2022-23.
• India's GDP growth forecast for FY24 was also raised by 50 bps to 7.1 percent.
• According to the IMF an expected improvement in India’s credit growth will boost  consumption and investment . Also the financial sector growth in India is better than expected, boosting its overall growth rate prospect.