India, China to account for half of global growth in 2023, as IMF chief warns of ‘sharp slowdown’

Must read

International Monetary Fund (IMF) managing director Kristalina Georgieva has warned that a sharp slowdown will continue in 2023, with India and China remaining to be the only bright spots.

She said that while the world will grow at less than 3 per cent, half of it will be accounted for by the two Asian giants.

“The period of slower economic activity will be prolonged, with the next five years witnessing less than 3 per cent growth, our lowest medium-term growth forecast since 1990, and well below the average of 3.8 per cent from the past two decades,” the IMF chief said on Thursday.

“Some momentum comes from emerging economies —Asia especially is a bright spot. India and China are expected to account for half of the global growth in 2023. But others face a steeper climb,” she added.

She said that lower-income countries would be hit the hardest, as they will find it difficult to grow amidst a global slowdown.

“Poverty and hunger could further increase, a dangerous trend that was started by the Covid crisis,” she said.

India’s Central Bank pauses on rate hikes; RBI on standby mode

Georgieva’s remarks come ahead of the next week’s meetings of the IMF and the World Bank, where policy-makers will convene to discuss the global economy’s most pressing issues.

While the West, including the EU, is facing fresh headwinds in the wake of the banking collapse, India’s economic growth has so far been resilient.

About 90 per cent of advanced economies are projected to see a decline in their growth rates this year, she said.

The IMF chief’s projections are closely aligned with the Reserve Bank of India’s estimates, which has pegged India’s Gross Domestic Product (GDP) at 7 per cent for 2023.

While announcing RBI’s first bi-monthly monetary policy statement of FY24 on Thursday, RBI Governor Shaktikanta Das said that India’s real GDP growth for FY24 is projected at 6.5 per cent, with Q1 at 7.8 per cent, Q2 at 6.2 per cent, Q3 at 6.1 per cent, and Q4 at 5.9 per cent.

“The global economy is witnessing a renewed phase of turbulence with fresh headwinds from the banking sector turmoil in advanced economies,” he said.

(With inputs from agencies)

Source link

More articles

- Advertisement -


- Advertisement -

Latest article