IMF projects Indian economy to grow 6.1% in 2023; global growth to dip to 2.9 pc
New Delhi: The International Monetary Fund (IMF) on Tuesday released the January update of its World Economic Outlook. According to the update, IMF said growth in India is set to decline from 6.8 per cent in 2022 to 6.1 per cent in 2023 before picking up to 6.8 per cent in 2024, with resilient domestic demand despite external headwinds.
According to IMF in its January update, global growth which is estimated at 3.4 per cent in 2022 is projected to fall to 2.9 per cent in 2023 before rising to 3.1 per cent in 2024. Compared with the October forecast, the estimate for 2022 and the forecast for 2023 are both higher by about 0.2 percentage point, reflecting positive surprises and greater-than-expected resilience in numerous economies.
It also said negative growth in global GDP or global GDP per capita--which often happens when there is a global recession--is not expected. Nevertheless, global growth projected for 2023 and 2024 is below the historical (2000-19) annual average of 3.8 per cent.
The forecast of low growth in 2023 reflects the rise in central bank rates to fight inflation -- especially in advanced economies -- as well as the war in Ukraine. The decline in growth in 2023 from 2022 is driven by advanced economies; in emerging market and developing economies, growth is estimated to have bottomed out in 2022.
Growth is expected to pick up in China with the full reopening in 2023, according to the update. The expected pickup in 2024 in both groups of economies reflects a gradual recovery from the effects of the war in Ukraine and subsiding inflation. Following the path of global demand, world trade growth is expected to decline in 2023 to 2.4 per cent, despite an easing of supply bottlenecks, before rising to 3.4 per cent in 2024, IMF said.
IMF said growth in emerging and developing Asia is expected to rise in 2023 and 2024 to 5.3 per cent and 5.2 per cent, respectively, after the deeper-than-expected slowdown in 2022 to 4.3 per cent attributable to China's economy.
According to the update, growth in China is projected to rise to 5.2 per cent in 2023, reflecting rapidly improving mobility, and to fall to 4.5 per cent in 2024 before settling at below 4 per cent over the medium term amid declining business dynamism and slow progress on structural reforms.