Inflation in India likely to fall to 5% in 2023 and 4% in 2024: IMF

Inflation in India is expected to come down from 6.8% in the current fiscal year ending March 31 to 5% the next fiscal, and then drop further to 4% in 2024, the International Monetary Fund (IMF) said on Tuesday.

“Inflation in India as in other countries is expected to come down from 6.8 percent in 2022 to 5 percent in 2023 and then 4 percent coming towards the target in 2024,” Daniel Leigh, Division Chief, Research Department of the IMF told reporters.

“That partly reflects the central bank's actions,” he added.

According to the World Economic Outlook update released by the IMF on Tuesday, about 84 percent of countries are expected to have lower headline (consumer price index) inflation in 2023 than in year 2022.

It further said, the global inflation is set to fall from 8.8% in 2022 (annual average) to 6.6% in 2023 and 4.3% in 2024 -- above pre-pandemic (2017–19) levels of about 3.5 percent.

The projected disinflation partly reflects falling international fuel and non-fuel commodity prices due to weaker global demand. 

It also reflects the cooling effects of monetary policy tightening on underlying (core) inflation, which globally is expected to decline from 6.9% in the fourth quarter of 2022 to 4.5% by the fourth quarter of 2023, the IMF said.

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