The International Monetary Fund (IMF) has revised India’s growth forecast on Tuesday by 20 basis points to 6.1 per cent for FY24 citing the country’s stronger-than-expected growth momentum in the March quarter of FY23 as a reason for the revision.
The Organization for Economic Co-operation and Development (OECD) has also revised upward its growth forecast to 6 per cent for FY24 last month. India’s central bank, the Reserve Bank of India, expects the economy to expand at 6.5 per cent in the same financial year.
“Growth in India is projected at 6.1 per cent in 2023, a 0.2 percentage point upward revision compared with the April projection, reflecting momentum from stronger-than-expected growth in the fourth quarter of 2022 as a result of stronger domestic investment,” said the IMF.
In the March quarter of Financial Year 2023, India’s economic growth increased by 6.1 per cent, beating analysts’ expectations.
The manufacturing and construction sectors surprised the market with their upside results. However, for FY24, most professional forecasters expect the Indian economy to grow between 6 per cent and 6.5 per cent.
The global outlook :
The IMF has also raised its growth forecast for the global economy, turning slightly more positive despite slowing momentum from China. It raised global growth prediction by 0.2 percentage points to 3%, up from 2.8% at its April assessment.
The organisation believed that in terms of inflation, the Fund also expects an improvement from last year. Headline inflation is projected to reach 6.8 per cent, falling from 8.7 per cent in 2022 while the core inflation is seen declining more slowly to 6 per cent this year, from 6.5 per cent last year.
On the global superpowers – US and China – the IMF said the world’s largest economy is set to grow 1.8% this year and 1% in 2024 while China’s GDP is seen falling from 5.2 per cent this year to 4.5 per cent for 2024.