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International Monetary Fund Revises India’s Growth Projection To 9.5 Percent For FY22

The International Monetary Fund (IMF) trimmed the country's growth to 9.5 percent from an earlier prediction of 12.5 percent.

WASHINGTON — The International Monetary Fund (IMF) on July 27 revised India’s growth to 9.5 percent for the current financial year from 12.5 percent estimated earlier in April.

India’s Gross Domestic Product (GDP) growth projection is at 9.5 percent for 2021-22, as per the World Economic Outlook (WEO) report released by International Monetary Fund on July 27.

International Monetary Fund also revised the Gross Domestic Product growth for India in FY 2022-23 to 8.5 percent.

The International Monetary Fund has projected the global economy to grow at 6 percent in 2021 and 4.9 percent in 2022.

“The International Monetary Fund projects the global economy to grow at 6 percent in 2021 and 4.9 percent in 2022. The recovery remains uneven across regions, depending on access to vaccines. More in the updated World Economic Outlook,” International Monetary Fund said in a tweet.

“Growth prospects for advanced economies this year have improved by 0.5 percentage point, but this is offset exactly by a downward revision for emerging market and developing economies driven by a significant downgrade for emerging Asia,” said Gita Gopinath, Chief Economist of the International Monetary Fund in a blog

“For 2022, we project global growth of 4.9 percent, up from our previous forecast of 4.4 percent. But again, underlying this is a sizable upgrade for advanced economies and a more modest one for emerging market and developing economies.”

“International Monetary Fund estimates that the pandemic has reduced per capita incomes in advanced economies by 2.8 percent a year, relative to pre-pandemic trends over 2020-2022, compared with an annual per capita loss of 6.3 percent a year for emerging market and developing economies (excluding China),” said Gopinath.

The International Monetary Fund projected China to grow at 8.1 and 5.7 in 2021-22 and 2022-23, respectively.

“Elevated inflation is also expected in some emerging market and developing economies, related in part to high food prices,” the World Economic Outlook report said. “Central banks should generally look through transitory inflation pressures and avoid tightening until there is more clarity on underlying price dynamics,” 

The World Economic Outlook report said that vaccine access has emerged as the principal fault line along which the global recovery has split into two blocs: those that can look forward to further normalization of activity later this year (almost all advanced economies) and those that will still face resurgent infections and rising Covid-19 death tolls.

India witnessed a strong second wave of Covid-19 earlier this year. 

“The 2021 global forecast is unchanged from the April 2021 World Economic Outlook report, but with offsetting revisions,” the World Economic Outlook report said. 

“Prospects for emerging market and developing economies have been marked down for 2021, especially for Emerging Asia. By contrast, the forecast for advanced economies is revised up.”

(With inputs from ANI)

Edited by Amrita Das and Praveen Pramod Tewari

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