IMF cuts India’s Gross Domestic Product Growth forecast to 6.8% in 2022

The International Monetary Fund cuts its projection of India’s economic growth to 6.8% in 2022 on October 11, 2022, as it joins other agencies that have other trimmed forecasts. India had grown at 8.7 per cent in 2021-2022( April 2021 to March 2022).

The International Monetary Fund(IMF) projected a gross domestic product (GDP) growth of 7.4 per cent for India in the year that started in April 2022. Even that forecast was less than 8.2% projected in January this year. 

IMF cuts India’s GDP growth forecast to 6.8% for FY23, India remains on track to be one of the fastest-growing economies in the world.

— ANI (@ANI)
October 11, 2022

India’s global growth in 2022: Key details

1. In the annual World Economic Outlook report, India’s growth in 2022 is 6.8 percent.
2. The growth is 0.6 % less than that of the July forecast. This forecast reflects a weaker-than-expected outturn in the second quarter and more subdued external demand.
3. It is also estimated that the global growth will decrease to 3.2 percent in 2022 from 6.0 percent in 2021 and 2.7 percent in 2023. 
4. This reduced growth is the weakest since 2001, except for the global financial crisis and the acute phase of the Covid pandemic.

China’s economic growth: All you need to know

1. In China the growth rate projections 3.2 percent, down from 8.1 per cent growth rate in 2021.
2. The prolonged lockdowns in China under zero Covid policy have taken a toll on the economy, mainly in the second quarter of 2022.
3. The property growth that represents about one-fifth of China’s economic activities is rapidly weakening.
4. The IMF has also lowered next year’s growth forecast to 4.4 per cent due to a weakening property sector and continued lockdowns in China.

Challenges faced by the largest economies of the world

1. A significant slowdown in the largest economies’ growth has been reported. 
2. The expected reasons are a US GDP contraction in the first half of 2022, a euro area contraction in the second half of 2022 and huge COVID-19 outbreaks and lockdowns in China.
3. Challenges faced by the global economy also include three powerful forces, the Russian invasion of Ukraine, slowdown in China and a cost of living crisis caused by constant and broadening inflation pressures.
4. The tightening of monetary and financial conditions will slow growth to 1 per cent in the United States in 2023. 

What do you mean by IMF?

The International Monetary Fund (IMF) was formed in 1944 and started in December 1945. The organization is headquartered in Washington D.C and consists of 190 countries. It is a major financial agency of the United Nations and an international financial institution. Its stated mission includes working to foster global monetary cooperation, facilitate international trade, safeguard financial stability, decrease poverty, boost high employment and sustainable economic growth around the world.