The International Monetary Fund (IMF) on Tuesday lowered India's economic growth forecast for the current fiscal to 7.4% from the 8.2% estimated in April, a report by Livemint said. In its latest World Economic Outlook update, the IMF also lowered the country's growth forecast for the financial year 2023-24 by 0.8 percentage points to 6.1%.
"…Likewise, the outlook for India has been revised down by 0.8 percentage point, to 7.4 per cent. For India, the revision reflects mainly less favourable external conditions and more rapid policy tightening," the IMF said on Tuesday.
Despite the lowered forecast, India will remain one of the fastest growing key economies globally in 2022-23 as well as 2023-24, the Livemint report added.
Meanwhile, the IMF also cut the 2022 global domestic product (GDP) estimate to 3.2%, four-tenths of a point lower than the April forecast, and about half the rate seen last year.
Last year's "tentative recovery" from the pandemic downturn "has been followed by increasingly gloomy developments in 2022 as risks began to materialize," the IMF's World Economic Outlook update said. "Several shocks have hit a world economy already weakened by the pandemic," including the war in Ukraine which has driven up global prices for food and energy, prompting central banks to raise interest rates sharply, the multilateral agency added.
"The outlook has darkened significantly since April," said IMF chief economist Pierre-Olivier Gourinchas, news agency AFP reported on Tuesday. "The world may soon be teetering on the edge of a global recession, only two years after the last one," Gourinchas added.
"The world's three largest economies, the United States, China and the euro area are stalling with important consequences for the global outlook," he also said.