India’s Fastest-Growing Economy Despite the Global Downturn: IMF

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According to projections made by the International Monetary Fund, the rate of expansion of the Indian economy is expected to slow to 6.1% in 2023, down from 6.8% in 2022. (IMF).

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According to the International Monetary Fund (IMF), the good news is that India will continue to be the fastest-growing major economy in the world in 2023 and 2024. The International Monetary Fund (IMF) on Tuesday announced the update to its World Economic Outlook for January. According to this report, the IMF anticipates that global growth would slow from an estimated 3.4% in 2022 to 2.9% in 2023, and then it will increase to 3.1% in 2024.

According to the International Monetary Fund (IMF), the rate of economic growth in India is “expected to fall from 6.8 percent in 2022 to 6.1 percent in 2023 before picking up to 6.8 percent in 2024, with solid domestic demand in spite of external obstacles.” After a deeper-than-anticipated decline in 2022 to 4.3 percent owing to China’s economy, the report forecasts that growth in emerging and developing Asia is expected to rise in 2023 and 2024 to 5.3 percent and 5.2 percent, respectively. This comes after growth in 2022 dropped to 4.3 percent.

Since we last updated our predictions for India’s economic growth in October, we have not seen any significant changes. This current fiscal year, which began on April 1 and will end on March 31, has seen a growth of 6.8 percent, and we anticipate that next year’s growth will be somewhat lower, coming in at 6.1 percent. According to a report by the Asian News International (ANI), Pierre-Olivier Gourinchas, Chief Economist and Director of the Research Department at the International Monetary Fund (IMF), told reporters that “and that is mostly driven by external forces.”

According to the most recent information, it is anticipated that the rate of economic growth in China will increase to 5.2% in 2023, which is a reflection of the rapidly improving mobility, and then it is projected to fall to 4.5% in 2024 before settling at below 4% over the medium term as a result of declining business dynamism and slow progress on structural reforms.

The Chief Economist and Director also made the following statement: “Overall, I want to point out that emerging market economies on the whole and developing economies look to be already on their way up. ” The projected growth rate for the region is projected to move up from 3.9 percent in 2022 to 4 percent in 2023.

According to the most recent report from January, growth in the ASEAN-5 countries (Indonesia, Malaysia, the Philippines, Singapore, and Thailand) is also forecast to drop to 4.3% in 2023 before picking up to 4.7% in 2024.

When taken combined, China and India will be responsible for almost fifty percent of the expansion of the global economy in the year 2023. This is another important aspect to consider in this context. “This is therefore a really important contribution,” Olivier Gourinchas remarked.

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Regarding the matter of inflation, the IMF stated in its study that “about 84 percent of countries are likely to have a lower headline (consumer price index) inflation in 2023 than in 2022.” The annual average rate of global inflation is projected to drop from 8.8 percent in 2022 to 6.6 percent in 2023 and 4.3 percent in 2024, which is higher than the level of roughly 3.5 percent that existed before the pandemic (2017-19).

According to the IMF, the expected deflation is in part a reflection of falling worldwide prices for both fuel and nonfuel commodities as a result of decreased global demand. It also reflects the calming effects of monetary policy tightening on underlying (core) inflation, which is predicted to fall globally from 6.9% in the fourth quarter of 2022 (year over year) to 4.50% in the fourth quarter of 2023. This is expected to occur internationally.