The International Monetary Fund on Tuesday projected a growth of 8.2 per cent for India in the current fiscal year, this amid the global growth projection at 3.6 per cent in the wake of Ukraine war, news agency PTI reported.
In its annual World Economic Outlook report, the IMF said that India’s growth had been slashed by 0.8 percentage points as compared to the previous year forecast for the same period.
Last year, India had registered a growth rate of 8.9 per cent, and by 2023 it will grow at a rate of 6.9 per cent, the IMF report said.
The downgrade in the 2023 growth projection for India is partly due to the war in Ukraine which has triggered a rise in prices of energy and food, and also slowed the growth momentum.
China, which registered a growth rate of 8.1 per cent in 2021, has been projected to grow at 4.4 per cent in 2022 and by 5.1 per cent in 2023. India’s growth is twice its neighbour’s projections. The United States has been estimated to grow at 3.7 per cent in 2022 against 5.7 per cent in 2021. Its projection for 2023 has been downgraded to 2.3 per cent, according to the IMF report.
Notable downgrades to the 2022 forecast for Asia include Japan (0.9 percentage point) and India (0.8 percentage point), “reflecting in part weaker domestic demand — as higher oil prices are expected to weigh on private consumption and investment — and a drag from lower net exports,” PTI quoted the report.
In its report, the IMF has projected global growth at 3.6 per cent in 2022 and 2023, 0.8 and 0.2 per cent lower than in the January forecast, respectively. “The downgrade largely reflects the war’s direct impacts on Russia and Ukraine and global spillovers,” it said.
The IMF report has projected that Ukraine’ s economy is set to collapse by 35 per cent due to the Russian invasion, destruction of its infrastructure and massive exodus of the citizens to other countries.
The report has cited sanctions with the severing trade ties behind Russia’s GDP falling by 8.5 per cent. “The economic effects of the war are spreading far and wide — like seismic waves that emanate from the epicentre of an earthquake — mainly through commodity markets, trade, and financial linkages,” the report said.
“In addition to the war, frequent and wider-ranging lockdowns in China – including in key manufacturing hubs – have also slowed activity there and could cause new bottlenecks in global supply chains. Higher, broader, and more persistent price pressures also led to a tightening of monetary policy in many countries,” it said.
(With PTI inputs)