IMF Cuts India GDP Growth Forecast To 6.8% For FY23

The International Monetary Fund has cut India’s growth forecast for the ongoing financial year.

The IMF has forecast India’s GDP growth at 6.8% for FY23, according to the latest edition of the World Economic Outlook, published on Tuesday. It is 60 basis points lower than the forecast in July and 140 basis points lower than the forecast in April this year.

The outlook for India reflects a weaker-than-expected out-turn in the second quarter and more subdued external demand, the report said.

For FY24, the GDP growth forecast has been retained at 6.1%.

Latest forecasts project global growth to remain unchanged in 2022 at 3.2%, and to slow down to 2.7% in 2023—0.2 percentage points lower than the July forecast—with a 25% probability that it could fall below 2%, the WEO report said.

More than a third of the global economy will contract this year or the next, 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.”

According to the report, the global economy continues to face steep challenges, shaped by the lingering effects of three powerful forces: the Russian invasion of Ukraine, a cost-of-living crisis caused by persistent and broadening inflation pressures, and the slowdown in China.

Last week, the World Bank cut India’s GDP growth forecast to 6.5% for FY23 from 7.5% projected in June, according to its South Asia economic focus report for October 2022.