The Indian economy will grow by 6.3 per cent in the
Financial Year 2023-24, stated the projection by International Monetary Fund
(IMF). The growth projection higher from its July estimate of 6.1 per cent,
citing “stronger-than-expected consumption” during the June quarter.
In contrast, the agency expects global growth of 3 per
cent in 2023 and 2.9 per cent in 2024, with advanced economies expanding by 1.5
per cent in 2023 and 1.4 per cent in 2024.
The Washington-based agency presents Bharat’s economic
growth forecast on a fiscal year basis while it uses the calendar year for
other economies.
IMF’s growth calculation for Bharat is a notch below
the Reserve Bank of India’s (RBI) forecast of 6.5 per cent gross domestic
product (GDP) growth in the current fiscal.
The Indian economy recorded a 7.8 per cent growth
during the June quarter. Capital formation, a proxy for investments, and
private consumption expenditure, an indicator of consumption demand, reported
growth rates of 8 per cent and 6 per cent respectively, during this period.
The gross goods and service tax (GST) revenue, an
indicator of consumption, collected during June rose 12 per cent yearly to ₹1.6
trillion.
Other multilateral agencies, such as the Asian
Development Bank (ADB), expect Bharat to
grow 6.4 per cent during 2023-24.
In its latest World Economic Outlook (WEO), IMF raised
its US growth projection for 2023 by 0.3 percentage points, compared with its
July update, to 2.1 per cent, while cutting China’s 2023 growth forecast to 5 per
cent from the earlier forecast of 5.2 per cent.
According to the IMF forecast, the Euro Area will grow
0.7 per cent in 2023 and 1.2 per cent in 2024.
From the Indian perspective, RBI has kept the repo
rate unchanged at 6.5 per cent since April after raising it by 250 basis points
(2.5 per cent) since May 2022. RBI’s decision has come against the backdrop of
rising inflation. Bharat’s retail inflation fell to 6.83 per cent in August
from a 15-month high of 7.44% in July due to the easing of food prices.
On Tuesday, IMF said 81 per cent of global economies,
including the world’s 10 largest, have seen a decline in their medium-term
growth prospects.
The five emerging market economies – Brazil, China,
India, Indonesia and Russia – have contributed about 0.9 per cent percentage
points to the decline in medium-term global growth prospects between 2008 and
2023, the IMF report added.
On the climate front, the IMF said that a broad mix of
structural and financial policies is needed to create an attractive investment
environment for private capital to support climate finance needs in EMDEs
(emerging markets and developing economies).
Agencies
