IMF says India ‘very strong economy’ and one of bright spots globally

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The International Monetary Fund (IMF) on Tuesday (April 11) slightly lowered its global growth projection for 2023-24 to 5.9 per cent from 6.1 per cent earlier, but the financial agency has praised the Indian economy.  

Daniel Leigh, who is IMF division chief, said that the Indian economy is a “very strong economy” and the nation is one of the bright spots in the global economy right now with a high growth rate. 

Leigh said: “Yes, we have a growth rate for India which is 6.8 in 2022. Let’s not forget this is one of the bright spots in the global economy right now.” 

He added, “Such a high growth rate and it is moderating down to 5.9 with a -.2 revision compared to January, what’s happening here is also a set of historical revisions.” 

India’s inflation to slow to 4.9 per cent in the current year and further to 4.4 per cent next fiscal year, the IMF projects and the growth forecast is lower than the Reserve Bank of India (RBI) projection. The central bank predicted 7 per cent GDP growth for FY 2022-23 and 6.4 per cent in the ongoing fiscal that started on April 1.

IMF also predicted that most countries will avoid a recession this year despite high inflation in many countries, rising geopolitical tensions and financial stability. 

The IMF, in its World Economic Outlook (WEO) report, predicts the global economy will grow by 2.8 per cent this year and three per cent in 2024, which is a decline of 0.1 percentage point from its January forecasts. 

According to the report, the United States is expected to grow by 1.6 per cent in 2023, marginally higher than previously predicted. 

IMF chief economist Pierre-Olivier Gourinchas told a press conference Tuesday: “The global economy remains on track for a gradual recovery from the pandemic and Russia’s war in Ukraine.”  He added that “the massive and synchronized tightening of monetary policy by most central banks” had begun to bring inflation lower.

(With inputs from agencies) 

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