IMF raises India’s FY24 forecast to 6.1%

economictimes.indiatimes.com:

International Monetary Fund (IMF) bumped up India’s growth forecast for FY24, citing strong domestic investment while cautioning that the global economy is not “out of the woods” yet and that the world’s battle against inflation is far from over. The multilateral lender expects India to clock 6.1% growth in FY24, up from 5.9% estimated in April.

The FY25 forecast is unchanged at 6.3%. “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,” the IMF stated in its July update of the World Economic Outlook (WEO).

India’s economy grew by a better-than-expected 6.1% in the March quarter, lifting FY23 expansion to a strong 7.2%. The IMF’s projection is lower than the Reserve Bank of India’s estimate of 6.5% growth in FY24.

The Asian Development Bank, in its update released last week, also retained India’s growth forecast at 6.4%, citing a recovery in consumption demand in rural and urban areas.Global economy The Fund said the global economy continues to gradually recover from the pandemic and Russia’s invasion of Ukraine. The Covid-19 health crisis is officially over and supply-chain disruptions have returned to pre-pandemic levels, it said, adding that economic activity was resilient in the first quarter and the US banking turmoil remains contained.

“The resolution of US debt ceiling tensions has reduced the risk of disruptive rises in interest rates for sovereign debt, which would have increased pressure on countries already struggling with increased borrowing costs,” it stated. Under the baseline forecast, the global economy is