IMF lowers its prediction for India's GDP growth to 7.4% in FY23

27 Jul 2022 , 11:41 AM

The Gross Domestic Product (GDP) estimate for India’s economic growth for the fiscal year 2022—2023 was further reduced by the International Monetary Fund (IMF) on Tuesday by 80 basis points to 7.4%.

India’s growth forecast was revised downward by the International Monetary Fund in April from 9% to 8.2%. In addition, the institution lowered its prediction for the nation’s growth to 6.1% for the fiscal year 2023—2024.

Although a global recession in 2022 is predicted to occur due to growth of 3.2%, according to the IMF’s World Economic Outlook (April edition), the balance of risks is heavily skewed to the downside due to a variety of factors that could have a negative impact on the performance of the global economy.

The report stated, “a world economy already weakened by the pandemic has been hit by several shocks, including higher-than-expected inflation worldwide, especially in the United States and major European economies, which has tightened financial conditions; a worse-than-anticipated slowdown in China, reflecting COVID-19 outbreaks and lockdowns; and additional negative spillovers from the war in Ukraine.

In addition, the IMF lowered its projections for global growth, stating that unchecked downside risks from high inflation and the Ukraine conflict could push the global economy into a recession.

The IMF estimated that global real GDP growth will decrease from its April prediction of 3.6% to 3.2% in 2022. It further stated that declines in China and Russia were the primary causes of the second quarter’s global GDP contraction.