IMF projects India’s growth at 6.1% in 2023

The International Monetary Fund (IMF) on Tuesday projected India's growth to be 6.1 per cent in 2023 from 6.8 per cent in 2022, though the country will remain the fastest-growing large economy in 2023 and 2024.

The international agency on Tuesday released the January update of its World Economic Outlook, according to which the global growth is projected to fall from an estimated 3.4 per cent in 2022 to 2.9 per cent in 2023, then rise to 3.1 per cent in 2024.

The IMF in its note said: "Growth in India is set to decline from 6.8 per cent in 2022 to 6.1 per cent in 2023 before picking up to 6.8 per cent in 2024, with resilient domestic demand despite external headwinds."

According to the report, growth in emerging and developing Asia is expected to rise in 2023 and 2024 to 5.3 per cent and 5.2 per cent, respectively, after the deeper-than-expected slowdown in 2022 to 4.3 per cent attributable to China's economy.

"Our growth projections actually for India are unchanged from our October Outlook. We have 6.8 per cent growth for this current fiscal year, which runs until March, and then we're expecting some slowdown to 6.1 per cent in fiscal year 2023. And that is largely driven by external factors," Pierre-olivier Gourinchas, chief economist of IMF, told reporters here.

According to the update, growth in China is projected to rise to 5.2 per cent in 2023, reflecting rapidly improving mobility, and to fall to 4.5 per cent in 2024 before settling at below 4 per cent over the medium term amid declining business dynamism and slow progress on structural reforms.

The IMF chief economist said, "Overall, I want to point out that emerging market economies on the whole and developing economies seem to be already on their way up. We have a slight increase in growth for the region from 3.9 per cent in 2022 to 4 per cent in 2023."

The January update also said growth in the ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, Thailand) is similarly projected to slow to 4.3 per cent in 2023 and then pick up to 4.7 per cent in 2024.

"Another relevant point here is that if we look at both China and India together, they account for about 50 per cent of world growth in 2023. So a very significant contribution," Gourinchas said.