NEW DELHI — The International Monetary Fund (IMF) has raised its 2023-24 GDP growth forecast for India to 6.3 per cent on the back of strong consumption demand, while the multilateral lending agency cut China’s growth rate to 5 per cent.
“Growth in India is projected to remain strong, at 6.3 percent in both 2023 and 2024, with an upward revision of 0.2 percentage point for 2023, reflecting stronger than expected consumption during April-June,” the IMF said in its annual publication, World Economic Outlook (WEO), released on Tuesday.
The Fund had raised its growth forecast for India for this year by 20 basis points to 6.1 per cent in July and has increased it for the second time to bring it in line with the World Bank’s estimate.
The growth forecast of the two multilateral financial agencies has also come closer to the Reserve Bank of India’s estimate of 6.5 per cent,
The IMF’s latest growth forecast comes a month or so after data released by the Statistics Ministry on August 31 showed the Indian economy expanded by 7.8 per cent in April-June.
The IMF reduced the growth forecast for China by 20 basis points to 5 per cent for 2023 and by 30 basis points to 4.2 per cent for 2024, citing the crash in the real estate sector that has been dragging the economy down.
“In China, the pandemic-related slowdown in 2022 and the property sector crisis contribute to the larger output losses of about 4.2 per cent, compared with pre-pandemic predictions. Other emerging market and developing economies have seen even weaker recoveries, especially low-income countries, where output losses average more than 6.5 per cent,” the IMF said.
“The strongest recovery among major economies has been in the US, where GDP in 2023 is estimated to exceed its pre-pandemic path. The euro area has recovered, though less strongly—with output still 2.2 per cent below pre-pandemic projections, reflecting greater exposure to the war in Ukraine and the associated adverse terms-of-trade shock, as well as a spike in imported energy prices.”
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