India in relative bright spot compared to others: IMF as it cuts global growth


New Delhi: Global growth is expected to slow further next year, the International Monetary Fund (IMF) said Tuesday, downgrading its forecasts. In its latest World Economic Outlook, the multilateral agency highlighted that the global economy continues to face challenges, including inflation, tighter financial conditions, Russia’s invasion of Ukraine, and the lingering covid pandemic.

India has not remain unimpacted in terms of economic growth when everyone is slowing down, but is doing better and is in a relatively bright spot compared to other countries, a top IMF official said, PTI reported.

“Almost every country is slowing. In that context, India is doing better and is in a relative bright spot compared to the other countries in the region,” IMF Director of Asia and Pacific Department, Krishna Srinivasan told PTI in an interview.

IMF has sharply cut India’s economic growth estimate for FY23 to 6.8% from its July estimate of 7.4%, citing the impact of external headwinds and w eaker-than-expected second-quarter growth.

More than a third of the global economy will contract in 2023, while the three largest economies — the United States, the European Union, and China — will continue to stall, it said.

“In short, the worst is yet to come, and for many people, 2023 will feel like a recession,” said Pierre-Olivier Gourinchas, the Economic Counsellor and the Director of Research of the IMF, in his forward to the WEO released during the annual meeting of the IMF and the World Bank.

IMF has praised the Reserve bank of India (RBI) for tightening the monetary policy to curb inflation in the country.

“The RBI has appropriately been tightening to fight inflation as the inflation is above target, and since May, if my memory serves me well, it sort of delivers 190 basis points rate hikes and we think further tightening is needed to bring inflation to its target,” Garcia Pascual, Deputy Division Chief of the Monetary and Capital Markets Department of the IMF, told reporters at a news conference in Washington.

India’s official data released in August showed the economy grew well below expectations at 13.5% in April-July due to the dismal performance of the manufacturing sector.

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