The most recent World Economic Outlook report from the International Monetary Fund (IMF) was released on Monday. According to the research, India’s economy has maintained its status as “a bright light” and is expected to contribute, along with China, half of the world’s growth in 2023. The combined strength of the US, the largest economy in the world, and Europe, which is home to some of the largest economies, will only account for a tenth of it.
IMF chief economist Pierre-Olivier Gourinchas stated that India “remains a bright spot” in a blog post published alongside the World Economic Outlook update, a quarterly study.
“Together with China, it will account for half of the global growth this year, versus just a tenth for the US and euro area combined.”
India’s inflation is predicted to decrease from 6.8% in the current fiscal year, which ends on March 31, to 5% in the following budgetary, and then further to 4% in 2024.
Indian economy is predicted to rise by 6.1%, which is 0.7 percentage points less than the 6.8% growth rate for 2022
In 2023, the Indian economy is predicted to develop by 6.1%, which is 0.7 percentage points less than the 6.8% growth rate for 2022 that the fund had before predicted in its October estimate.
The IMF increased its prediction for this year’s global growth as a result of unexpectedly robust investment and consumption. China’s removal of the zero-Covid limits is anticipated to provide the economy a further boost.
The expected trajectory for the global economy is still for it to contract from an estimated 3.4% in 2022 to 2.9% in 2023, then rise to 3.1% in 2024.
However, since the forecast in late October, “adverse risks have decreased,” according to the IMF report.
“The year ahead will still be challenging… but it could well represent a turning point with growth bottoming out and inflation declining,” Gourinchas told reporters.
According to the analysis, contrary to earlier expectations, Germany and Italy will not experience recessions this year. Notably, despite the ongoing conflict in Ukraine, the European economy turned out to be “more resilient than projected.”
Britain was the only significant advanced economy that the IMF anticipated would enter a recession this year
With a 0.6 percent decline in GDP, Britain was the only significant advanced economy that the IMF anticipated would enter a recession this year. Rising living expenses, such as those for electricity and mortgages, are causing hardship for many people.
After China abandoned its “zero-COVID” lockdown rules in 2022, the IMF also significantly raised its growth prediction for the country for 2023, increasing it from 4.4 percent in the October forecast to 5.2 percent. China’s growth rate was severely impacted by the zero COvid policy, falling to 3.0 percent, below the world average for the first time in more than 40 years.
According to the organization, China’s growth would “fall to 4.5 percent in 2024 before settling at below four percent over the medium term amid declining business dynamism and slow progress on structural reforms.”