The International Monetary Fund (IMF) has forecasted India’s growth rate to be 6.1 percent in 2023. This growth was 1.2 percent higher than the forecast previously announced in April. The positive change reflects the momentum generated by inward investment and strong growth in the fourth quarter of 2022. In the latest IMF update, global growth is forecast to slow to 3.5 percent in 2023-2024 from a forecast of 3.5 percent in 2022.
Economic activity continues to be affected by the central bank’s policy of raising interest rates to combat inflation. Global headline inflation is expected to decline from 8.7 percent in 2022 to 6.8 percent in 2023 and further decline to 5.2 percent in 2024. Real inflation is forecast to decline more slowly. Inflation forecasts for 2024 have been revised upwards.
However, recent moves have reduced some of the risk of financial sector volatility. But the IMF warned risks to global growth have not yet disappeared. High inflation and potential disruptions could trigger further adversity. Financial sector volatility could resume as markets adjust to central bank policy tightening.
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