IMF raises India’s 2023 GDP growth forecast to 6.1%

livemint.com:

NEW DELHI : The International Monetary Fund (IMF) on Tuesday revised India’s GDP growth forecast to 6.1% for 2023, up from 5.9% projected by the financial institution earlier this year as a result of stronger domestic investment. “Growth in India is projected at 6.1% 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," IMF said in a report.

However, the IMF kept the growth forecast for 2024 at 6.3%, the growth rate it had predicted in April. IMF is not the only international financial agency to review the growth forecast for India.

Earlier in June, Fitch Ratings raised its FY24 (2023-24) growth forecast for the Indian economy to 6.3%, from 6% predicted earlier, citing strong growth in the April-June quarter so far and sustained near-term momentum. Meanwhile, the Reserve Bank of India (RBI) has projected FY24 Indian economic growth at 6.5%.

In terms of quarterly break-ups, the central bank expects 8% growth in the June quarter, followed by 6.5%, 6% and 5.7% in the subsequent quarters, RBI governor Shaktikanta Das said at the end of the Monetary Policy Committee (MPC) meeting last month. According to the IMF, most advanced economies are expected to see an especially pronounced growth slowdown, from 2.7% in 2022 to 1.3% in 2023.

“Policy tightening by central banks in response to inflation has raised the cost of borrowing, constraining economic activity. Immediate concerns about the health of the banking sector have subsided, but high interest rates are filtering through the financial system, and banks in advanced economies have significantly tightened lending